Oral Answers to Questions

TREASURY

The Chancellor of the Exchequer was asked—

Self-assessment Tax Returns

Andrew Rosindell: What estimate he has made of the number of individuals who will miss the deadline for submitting the self-assessment tax return in 2005–06.

Dawn Primarolo: About three quarters of returns have already been received by Her Majesty's Revenue and Customs, and we expect the overwhelming majority to arrive by the deadline.

Andrew Rosindell: Does the Minister agree that hard-working British taxpayers are facing fines because they are overburdened by a highly complicated tax system? Will she give an assurance today that she will simplify the tax system and spend more time chasing those who habitually avoid paying tax?

Dawn Primarolo: I can confirm to the hon. Gentleman, as he has not noticed, that we are already doing that. We have removed more than 1 million—[Interruption.] I cannot help it if the hon. Gentleman does not do his research properly. He may have noticed that more than 1 million taxpayers have already been removed from self-assessment, and 1.5 million are now using the shortened return, which has been welcomed by the National Audit Office. In addition, the NAO's reports specifically recommended that the HMRC should use penalties in order to pursue those who persistently fail to submit their tax returns on time. That is precisely what we are doing. It is in the interest of all taxpayers and I am sure that, on reflection, the hon. Gentleman will agree that the Government are pursuing the strategy that he advocates.

David Taylor: It is a bit much for Conservative Members to talk about complexity. The system that we inherited—I speak as an accountant who was involved at the time that it was implemented—was a disastrous mess in 1995–96. It was a shambles. Will my right hon. Friend accept my thanks for improving it in the intervening nine or 10 years and introducing internet filing? Can she reassure me about one aspect on which the hon. Member for Romford (Andrew Rosindell) is right when he says that that there is unacceptable complexity—namely, the account statements sent to individuals and clients? They need to understand hieroglyphics and ancient Greek to be able to plough through such a statement.

Dawn Primarolo: I assure my hon. Friend that the self-assessment system, the returns, the forms and the advice are constantly under review. It is because of those reviews that we have been able to make returns unnecessary for 1 million people, and allow a further 1.5 million to use a shortened return. I pay attention to the points that my hon. Friend makes, but I remind him and the House that the self-assessment regime collects some £17 billion a year, and the overwhelming majority of taxpayers are complying with their obligations.

Nigel Dodds: The HMRC is encouraging more and more people to submit their returns via the internet, and as the deadline looms for this year, a number of my constituents and businesses have reported problems with using the internet and downloading the various forms. Can the Paymaster General look into that and reassure people that it will be a smooth process?

Dawn Primarolo: I shall certainly look into the point that the hon. Gentleman has raised. Internet filing has expanded considerably and is working well, but if a huge number of people leave it right to the deadline and then try to get on to the system, I cannot say what the consequences will be in terms of waiting time. All the information provided to me as the Minister is that e-filing is working very well and taxpayers should have access to it.

UK Economy (Growth)

James Gray: What his latest estimate is of growth in the UK economy in each of the next three financial years.

Gordon Brown: The latest estimates for growth are contained in full in the pre-Budget report. I can announce that as part of our growth strategy for equipping ourselves to tackle globalisation, we will be holding a series of international forums attended by global business leaders on the future of financial services, digital electronics, science, education, health care and modern manufacturing, the conclusions of which will inform our Budget and spending review.

James Gray: Is it not astonishing that the Chancellor of the Exchequer cannot even bring himself to say the figure included in the pre-Budget report—1.75 per cent. growth for the United Kingdom? That compares with 3.6 per cent. in the United States, 2.9 per cent. in Japan and 2.6 per cent. in Australia. Why is it that those countries, which are just as exposed to the world economy and to oil prices as we are, have higher growth than ours? Why are we 19th out of 25 countries in the European Union and bottom of the growth league?

Gordon Brown: Perhaps the hon. Gentleman would add that we have been growing faster than France, Germany, the euro area and the European Union as a whole. Perhaps he will also add that since 1997 the growth rate of the British economy has been far superior to the growth rate achieved in 18 years of Conservative Government. Perhaps he would like to remind the House that inflation is half what it was in the Conservative years, and interest rates and mortgages are half what they were in the Conservative years.

Sadiq Khan: Does my right hon. Friend agree that one of the reasons why we have had a record period of economic growth is our commitment to economic stability and social justice? In that regard, does he welcome the consensus—for this week, anyway—on the fact that economic stability should take priority over tax cuts?

Gordon Brown: The shadow Chancellor might want to stand to remind us of the remarks that he made only a few weeks ago congratulating Labour's success on macro-economic policy, telling us that Labour has improved the macro-economic management of the UK economy, and saying that there is public confidence in Labour's ability to manage the economy. That, I believe, is what the public think as well.

Peter Tapsell: Are the Chancellor's growth estimates influenced by the strictures from Europe on his failure to remain within the public expenditure limits imposed on him by the stability and growth pact, of which, unlike me, he was such a great admirer when the Bill on the Maastricht treaty was before the House?

Gordon Brown: The answer is no. The reason is that we have two fiscal rules. One is the golden rule, where current expenditure should be paid for by revenues—a golden rule that we are meeting and will meet. That is in contrast to the last—[Interruption.] If I may so, the last Conservative Government had two economic cycles. They failed to meet the golden rule in the first economic cycle by £150 billion and they failed to meet it in the second cycle by £250 billion, so we will take no lectures from the Conservatives on that. As for the hon. Gentleman's advice on economic policy, I would have thought more of it had he supported the independence of the Bank of England.

Dennis Skinner: Is the Chancellor of the Exchequer aware that growth in the Bolsover economy is pretty good, continuing on track? The Shirebrook pit enterprise is nearly completed—2,000 jobs in that area alone. There will be another 5,000 at the Markham and Bolsover industrial site, when the new motorway intersection, which I have championed for the past five years, starts at Easter. We have got unemployment down to half of what it was when the Tories carried out their brutality of closing the pits. Everything is on stream—[Interruption.] I want the Chancellor—

Mr. Speaker: Order.

Dennis Skinner: I have not dealt with—

Mr. Speaker: Order. Bolsover sounds like Utopia.

Gordon Brown: I think that the whole House would agree, not just in Bolsover but across the United Kingdom, that there are 2.3 million more jobs in the British economy than there were in 1997. Even in the most difficult circumstances of last year, an extra 220,000 jobs were created. Unemployment is half what it is in Germany, half what it is in France, and virtually half what it is in the euro area. Unemployment is lower than in the United States of America.

Michael Spicer: Why has the rate of productivity gone down ever since this Government took office?

Gordon Brown: Productivity has been rising every year. The only years in which it has fallen in Britain were years of Conservative Government. The only years in which manufacturing productivity fell were years of Conservative Government. Productivity has been rising in every year of this Labour Government and manufacturing productivity has been rising as well. The hon. Gentleman is chairman of the 1922 committee and he should get a researcher to get his facts right.

Brian H Donohoe: I disagree fundamentally with the Chancellor of the Exchequer when it comes to that God-awful tune at half-past 5 in the morning. Its demise will certainly do something to improve the economy of the country. On a particular constituency point that worries me, there are problems attached to high energy costs. I understand that assurances are about to be given to the Chancellor about that, and will he reinforce that this morning?

Gordon Brown: The signature tune at 5.30 in the morning is a good one, even if it does not include the music of Ayrshire, which is my hon. Friend's home county. On energy prices, we recognise that there has been a doubling of oil prices over the past 18 months—it has affected every economy in the world. What is remarkable in those circumstances—the Monetary Policy Committee of the Bank of England has referred to it—is that inflation in this country remains low. We remain on target for inflation, and I can think of no decade in which oil prices have doubled when inflation has been kept so low. That is a tribute to the macro-economic framework that we have developed over the past eight years.

Vincent Cable: As the Chancellor is committed to locking in the benefits of growth and financial stability, why has he not done more to take advantage of the extraordinarily low prevailing long-term interest rates by converting a large amount of public debt—not just a token 0.1 per cent.—through refinancing, thereby saving the taxpayer a great deal of money? Is the Treasury asleep?

Gordon Brown: We have taken advantage of that. It was this Government who announced the 50-year issue, and I hope that the hon. Gentleman will acknowledge the fact that we did so. I have to say to the hon. Gentleman, who is a rock of stability in this changing Liberal landscape—even though one of the people he is not supporting for the leadership is keeping a close eye on him today—that not even a 50-year issue would solve the problems that the Liberals have with their public spending policies. He has dropped his tax policy, but even in the past few days all his spokesmen—on children, on transport and on London—have been announcing increased public spending plans. One time, one day, his figures will have to add up.

Anne Snelgrove: What matters most to hard-working families in my constituency—which, coincidentally, is next door to that of the hon. Member for North Wiltshire (Mr. Gray), who asked the original question—is maintaining a stable economy. What assessment has my right hon. Friend made of how best we can equip workers and families in our constituencies for the future challenges of globalisation?

Gordon Brown: The first thing for families is the child tax credit. I am very disappointed that the shadow Chancellor wants to cut that credit. The second thing is education spending, which we are doubling in my hon. Friend's constituency and throughout the country. The hon. Member for North Wiltshire (Mr. Gray) complains about our economic policy and implicitly suggests that we are spending too much, but I have here the statement that he issued on his website on 11 January 2006. He stated:
	"MP outraged at level of secondary school funding",
	demanding that we spend more, not less. Perhaps he should have a word with the shadow Chancellor.

George Osborne: The Office for National Statistics confirmed this week that the Chancellor's growth forecasts for last year were hopelessly wrong. Looking forward to his next growth forecasts, what does he identify as the greatest risk? Is it the inadequate savings, the large and persistent current account deficit or the slowdown in productivity growth?

Gordon Brown: The greatest risk would be to pursue the policies of the shadow Chancellor. It is absolutely clear that he would put stability at risk: he is considering a flat tax; he would introduce a third fiscal rule; he would cut the new deal; and he would cut the child tax credit. All those policies that are giving stability and prosperity to the British economy, but the hon. Gentleman's policy would put that at risk. He likes to give the impression to the public that he is a policy-free zone, but the abolition of the new deal, cuts in tax credit, the consideration of a flat tax and, if I may say so, the third version this week of a third fiscal rule, would all put the stability of the economy at risk.

George Osborne: The Chancellor says that we are the same old Tories, yet the Prime Minister says that we are changing our minds. One day, they will sort out their attack. In the meantime, assuming that the Chancellor has finished planting Union jacks in everyone's front garden, will he turn his attention to productivity growth? The trend rate of productivity growth has fallen while he has been Chancellor, as the Monetary Policy Committee noted this week. In 1998, he said that productivity growth was
	"the fundamental yardstick of economic performance".
	How is he measuring up?

Gordon Brown: Productivity has risen every year under this Government. Manufacturing productivity continues to rise. Growth in the British economy is higher every year on average than it was in the Conservative years. The Conservatives are going to have to face up to that. Let us have a bit of consistency from the shadow Chancellor. He congratulated me on my success with macro-economic policy and said that I had improved the macro-economic management of the UK economy. He said that there was public confidence in Labour's ability to manage the economy. He said that Labour had established economic credibility. He said that it was the Conservatives who had lost their reputation for economic competence and that it was the Conservatives short-term opportunism that was hampering long-term policy. If he agrees with that, it is his own party that he should be criticising, not me.

G8 Ministerial Meeting

Tobias Ellwood: If he will make a statement on his proposed post-Gleneagles agenda to be presented at the meeting of G8 Ministers next month in Moscow; and what discussions he has had with G8 partners on this.

Judy Mallaber: If he will make a statement on his priorities for progress towards relieving international poverty and debt relief at the forthcoming international Finance Ministers meeting.

Gordon Brown: Our priorities for the G8 are to extend debt relief to further numbers of the poorest countries; to ensure that aid promises that have been made are delivered in free universal education and universal health care; to set up a $20 billion fund for the environment in the poorest countries; to build on the innovative $4 billion international finance facility with new advanced market mechanisms for the purchase of life-saving drugs; and the advance of the launch tomorrow of the global plan to stop tuberculosis, which even now kills 2 million people a year. The Secretary of State for International Development will announce this morning £41.7 million from Britain for anti-TB drugs for India.

Tobias Ellwood: The Chancellor mentioned poorer countries. I think that the House will welcome many of the initiatives that resulted from the Gleneagles summit, but at the next summit in Moscow will the Chancellor take the opportunity to speak to his French and German counterparts and establish whether we can review the common agricultural policy? It is hurting those poorer countries, and hurting farmers in particular.

Gordon Brown: The answer is yes. The hon. Gentleman may know that only a few weeks ago the Treasury, together with the Department for Environment, Food and Rural Affairs, published our proposals for the reform of agriculture policy, to be implemented over the next 10 years. We will submit them to the review of agriculture policy that is taking place.
	I have already expressed my belief that a trade deal in the world will require movement from America and Europe on agriculture policy. I hope that there is unanimous support for the proposals in the House.

Judy Mallaber: Pupils from 21 Amber Valley schools filled Christmas boxes for children in Mozambique who were affected by HIV/AIDS and poverty. I have also engaged in talks in many schools about the 100 million children who are not being given an education. How can my right hon. Friend convince my young constituents that Finance Ministers talking about debt relief will have a concrete effect in meeting our millennium goals, getting children into school and tackling the AIDS epidemic in Africa?

Gordon Brown: I visited Mozambique, and I think that the children in my hon. Friend's local schools should be congratulated on what they have done. Only 6,000 people in Mozambique are being helped with retroviral drugs for HIV/AIDS, when 600,000 are suffering from the disease. Until we can provide more money, either through the global fund to fight AIDS, tuberculosis and malaria or through other measures, many people will not be able to obtain the treatment that they need.
	Debt relief does help, however. I believe that £6 billion of Mozambique's debt has been written off as a result of the decisions that we made last year. Mozambique is one of the biggest beneficiaries from the £170 billion of debt that is to be written off as a result of the cumulative effect of all the decisions—and so it should be, because it is an economy that is trying to grow. It is eradicating corruption, taking action to improve the functioning of its economic policy, and deliberately putting more money into education and health. When I am in Davos tomorrow, I will meet the President of Mozambique, and will be able to tell him that we shall do more in the next few years to support the global fund.

Nicholas Winterton: Two days ago, I had the honour of meeting the recently appointed Bangladesh high commissioner here in London. He is immensely grateful for the aid and assistance that this country gives his country, which is one of the poorest in the world, but he was very disappointed by the outcome of the meeting in Hong Kong, and particularly by the lack of progress in the introduction of genuine fair trade by Europe. What can the Chancellor do to persuade Europe, and all the countries of Europe, to support a policy of genuine free trade so that countries such as Bangladesh can trade their way out of poverty?

Gordon Brown: I know that the hon. Gentleman has taken an interest in such issues, especially those associated with countries that have been part of the British Commonwealth or the British empire in the past. I think that the proposals from India and Brazil to break the deadlock in the trade negotiations should be taken seriously. I believe that a further meeting of major players will take place in Davos this week. I hope that we shall see further progress over the next few weeks, because the longer it takes us to reach a trade settlement the more not just our country and others that are part of   the advanced industrial economies, but—most of all—the poorest countries in the world, particularly those in Africa and Asia, will lose out. I hope that during the next few weeks we shall see a further attempt to restore the momentum.

John McFall: The Treasury Committee's report on the 2005 pre-Budget report, published this week, welcomed the doubling of aid to Africa, as well as the 100 per cent. multilateral debt write-off for the 38 highly indebted poor countries, but the documents issued at Gleneagles contained 212 separate commitments. Given that the G8 has no independent secretariat, will the Chancellor ensure that there are adequate mechanisms to monitor the commitments, so that we can deliver to those poor countries on the ground?

Gordon Brown: I am grateful to my right hon. Friend, who has taken a big interest in those matters over the years and has visited Africa on many occasions. The G8 Finance Ministers are meeting in Moscow in the middle of February, and I have asked that it be put on the agenda how we follow through the commitments made at Gleneagles. We will discuss education, debt relief, the health programmes and the follow-through from the commitments made on aid. I can assure him that we will do so.
	I know that many people involved in the G8 summit, and some of the celebrities in particular, are following this through. Today, Bono is making proposals for enhancing the global fund, and I shall be meeting him tomorrow to discuss them. I know that another member of the Gleneagles delegation, Bob Geldof, is now on missionary work in relation to the Conservative party.

UK Economy (Competitiveness)

John Bercow: What factors he takes into account in assessing the competitiveness of the UK economy.

Des Browne: We assess economic performance over the economic cycle using a range of measures, including gross domestic product and productivity growth, labour market performance and economic stability. The fact that the UK is the only G7 economy to have avoided any quarters of contraction in output since 2001 shows that the UK is highly competitive in today's increasingly global economy.

John Bercow: I am grateful to the right hon. Gentleman for that lamentably complacent reply. Given that skills shortages are endemic, productivity growth is at record lows, the regulatory burden upon business is more onerous than ever and this country has slumped from fourth to 13thin the international competitiveness league table since the Government took office, why does he not now accept that the Government and the Chancellor are wrong and that respected commentators—from the CBI to the Institute of Directors and from the British Chambers of Commerce to the London School of Economics—are right to criticise him?

Des Browne: I am disappointed that the hon. Gentleman thinks my answer is complacent.

John Bercow: Lamentably.

Des Browne: "Complacent" will be quite sufficient to support my disappointment. I took care to answer specifically the hon. Gentleman's question. He asked what factors are taken into account in assessing competitiveness and I answered the question. It did not seem to me that, in a factual question, there was room even for his extravagant expressions of regret.
	The hon. Gentleman has expressed judgment on whether the steps that the Government have taken were appropriate, and he will recollect that he was one of themost vociferous and consistent critics of the Government's decision in the early days to give the Bank of England independence. He may well, like most of his colleagues on the Conservative Benches, have changed his view on that, and now has to accept the judgment made by the Government. He nods to indicate that he has.
	The hon. Gentleman will know, from his experience and knowledge of this area, that the most important thing in relation to competitiveness and productivity for the UK is macro-economic stability. Indeed, the shadow Chancellor effectively said that in the speech that he made on Monday, when he said that he would not sacrifice the stability that we in government have won for this country for any other purpose, even tax cuts. I suggest to the hon. Gentleman that a significant number of factors are involved on which there may be differing views, but stability has been achieved.

Jim Cunningham: Does my right hon. Friend recall that under the previous Government, some of the major companies in this country refused to or could not take on apprentices?

Des Browne: Of course I remember that, and my constituents remember it even more painfully because they lived through those times, when they saw their young people being deskilled, effectively and substantially, by that. I celebrate the fact that, across the UK, there are now 300,000 apprentices in training.

Richard Spring: What role does the Chief Secretary think the collapse in our world competitiveness has played in the fact that we have the worst trade imbalance in our history?

Des Browne: There has not been a collapse in the competitiveness of the UK. In fact, only this week an independent survey indicated that the UK is the No. 1 place in the world for inward investment. That is the view that other businesses take of the competitiveness environment and productivity of this country. As my right hon. Friend the Chancellor has already told the House, productivity has grown in every year of our stewardship of the economy. The hon. Gentleman's party could not say the same.

Rob Marris: As my right hon. Friend says, one of the measures of competitiveness is productivity. There are different ways to measure productivity, one of which is average output per worker per hour. Another, and a major measure for our economy, is the average output per person of working age per year and the Government have a wonderful record in that regard because of high employment. Will my right hon. Friend assure me that we will continue with our policy of high employment because work is the best way out of poverty?

Des Browne: My hon. Friend is entirely correct. The challenge for the Government is to increase productivity year on year while increasing the number of people in work. We have achieved that to such an extent that there has been a record increase in the number of people in employment. I must remind Opposition Members that that contrasts with the record levels of unemployment when they were in charge of the economy.

John Hemming: Is the Chief Secretary aware of the substantial damage done to competitiveness by relative gas prices in the UK vis-à-vis the continent? Prices in the forward market are around 40p a therm on the continent, while they are about twice that in the UK. What are the Government going to do about the incompetent way in which they have handled the gas market?

Des Browne: I do not accept that the Government have been incompetent in our handling of the gas market. I am not immediately able to confirm the particular statistics that the hon. Gentleman quoted, but I will accept them from him. Recently, however, my right hon. Friend the Secretary of State for Trade and Industry explained from the Dispatch Box exactly what we were doing to ensure that industry in this country is properly served in energy, despite the fact that we live in a globalised economy in which energy prices have increased significantly.

Lindsay Hoyle: Drag factors on competitiveness are over-burdensome regulation and the gold-plating of EU regulation. I know that the Government are working hard to reduce regulation, but could we set higher targets to ease the burden on small companies?

Des Browne: My hon. Friend will be aware that in the pre-Budget report my right hon. Friend the Chancellor announced a review of this very phenomenon—the gold-plating of EU regulation. The Government believe, as does my hon. Friend, that inefficient and over-burdensome regulation can impose a significant cost on business and we have introduced, and are seeing through, radical and thorough-going reforms to business regulation across the Government.

Theresa Villiers: Does the Chief Secretary accept that in a globalised economy, it is vital for our competitiveness that our tax system be as simple, efficient and user-friendly as possible? If so, is he concerned that the World Economic Forum now ranks the UK as low as 67th in the world for tax efficiency; that the length of Tolley's standard textbook on tax has doubled since Labour took power since 1997; and that only this week Mike Brewer, of the Institute for Fiscal Studies, said that the Chancellor had
	"done damage to our reputation"
	as a country with
	"an efficient and transparent tax system"?

Des Browne: First, I welcome the hon. Lady to her position and congratulate her on her promotion. I look forward to working with her. I ask her to pass on my appreciation to her predecessor for the good working relationship that we had.

Gordon Brown: Her eight predecessors.

Des Browne: My right hon. Friend reminds me that the hon. Lady has eight predecessors.

George Osborne: How many Chief Secretaries has the Chancellor had?

Des Browne: I am not sure, but I think four.
	Unfortunately, the hon. Lady is wrong in her analysis of the tax situation in the UK. Since we came to power, we have cut corporation tax, income tax and small business tax and introduced research and development credits, to such an extent that many international studies consistently show the UK to be an attractive place to do business, with a relatively low tax burden. In fact, the latest OECD figures show that the UK tax burden is well below the average for the EU 15 and the EU 25 countries.

New Deal for Young People

Dawn Butler: What assessment he has made of the economic effects of the new deal for young people.

Des Browne: Since 1998, the new deal has helped more than 630,000 young people to find jobs, contributing to a fall in long-term youth unemployment from 210,000 in May 1997 to 52,700, which compares with a high of 400,000 in the mid-1990s. Independent research has shown the new deal for young people's positive impact on the economy, with estimated benefits to the economy of up to £500 million a year.

Dawn Butler: In my constituency, 3,699 young people have participated in the new deal, with 1,200 of them obtaining sustainable employment. Scrapping the new deal would have a detrimental effect on those young people, who are finally finding a means to work their way out of poverty. Will my right hon. Friend assure me that we have no intentions of scrapping the new deal?

Des Browne: My hon. Friend can be assured that we have no intentions of scrapping the new deal. As my right hon. Friend the Chancellor explained in the pre-Budget report, we intend to build on the new deal going forward, to learn from its success in the past and to create better opportunities for those who will take advantage of it in future. Let us contrast that with the policy of the Conservative party, which would scrap the new deal, and by doing so effectively scrap and throw all those young people who have benefited from it—

Mr. Speaker: Order.

Adam Afriyie: Of course there are individual success stories under the new deal, and they must be welcomed. My concern continues to be for the least well-off and most vulnerable in society. With one in 10 people struggling with dyslexia or some other learning disability, will the Government persist in inflicting their complex tax system on the most vulnerable in society?

Des Browne: I welcome the hon. Gentleman's recognition of what he describes as the individual successes. In fact, the success of the new deal is the aggregate of all those individual successes. In all our constituencies, including his I am sure, it has taken significant numbers of young people from having no future to having significant opportunity to move themselves up the labour market and to improve their conditions. The challenge that we face in relation to the people whom he describes is that they have not had an opportunity to work in the past, rather than that they are faced with the complexity of income tax forms. My right hon. Friend the Secretary of State for Work and Pensions has set out our plans for the coming years to deal with the challenges that those people face, and to move them nearer to and into the labour market. I was delighted that those on the Conservative Front Bench supported those plans.

Wayne David: Does the Chief Secretary agree that the new deal for lone parents has been particularly successful? Reforms are needed to the welfare system, however, to enable more lone parents to work.

Des Browne: My hon. Friend is right. When we came into power, about 45 per cent. of lone parents were working, and that figure is now slightly beyond 55 per cent.—56 per cent., I think. There is still significantly more to do. That is why, in the pre-Budget report, my right hon. Friend the Chancellor announced additional support through the new deal for lone parents, which was augmented by the announcement this week by the Secretary of State for Work and Pensions. He is entirely correct to identify the challenge that we face, but we will only meet that challenge by redoubling our efforts through the new deal.

Paul Goodman: To be a success, however, the new deal could reasonably be expected to produce a consistent fall in the number of young people who are neither in employment nor full-time education. New data released since the previous Treasury questions show that number to be 1.2 million. If the new deal really is such a success, can the Chief Secretary explain why that number is now 180,000 higher than when the Chancellor launched the new deal, and at its highest since he took office?

Des Browne: The hon. Gentleman articulates an argument for doing more on the new deal—more investment and, as I described it, redoubling our efforts—not for scrapping it. The fact is that the statistics that he quotes do not show the whole picture. That 1.2 million includes some people who are in part-time education or training. The situation is not nearly as bad as he describes it. I do not demur from the challenge—it is significant. We will only deal with this group of young people, however, if we are prepared to invest in them, not if we ignore them.

Barbara Keeley: Last Friday, a group of young people from high schools in my constituency came in to discuss their issues with me. The interesting thing is that worries about future employment did not rank among the concerns even of young people from a ward that is among the top 3 per cent. most deprived in the country. Does my right hon. Friend agree that we must redouble our efforts on the new deal, so that those young people can continue to feel that confidence?

Des Browne: My hon. Friend describes one of the remarkable contrasts between the situation only a decade ago and the situation now for young people. Most young people in most of our communities now have the opportunity of a job, which they did not have before this Government came to power, but there are—it has already been highlighted in some of the supplementary questions—continuing challenges. Because of the state of the labour market, the bulk of the people coming into the new deal now are those who present the greatest challenge. We need to build on, to revise and to reform the new deal in order that it can address those issues more consistently.

HMRC Estate

Henry Bellingham: When he next expects to meet senior representatives of HM Revenue and Customs to discuss the outsourcing of their buildings and other assets.

Dawn Primarolo: I meet with senior HMRC officials regularly on a range of issues. There are no meetings planned to discuss the matter to which the hon. Gentleman refers.

Henry Bellingham: Is it true that as part of an outsourcing deal in 2001, 600 HMRC buildings were sold to Mapeley, an offshore Guernsey company, for £220 million? Is it also true that Savills recently valued those buildings at £566.6 million, a staggering 150 per cent. increase? Is not that a rotten deal for taxpayers? Does the Paymaster General agree that if she and the Chancellor were investment bankers and made such a duff deal, they would not just be in line to lose their bonuses, but would be facing the sack?

Dawn Primarolo: No, that is not true. Let me give the hon. Gentleman the facts. The HMRC estate was independently valued prior to the Mapeley contract at £370 million. That money was paid to the Department: £220 million first, then £150 million in facility payments. The National Audit Office looked at the report, published a report on 7 May 2004, and found that the deal had delivered benefits, that more was expected over the duration of the contract, and that therefore it represented value for money for the taxpayer. Those are the facts. The speculation is incorrect.

Bob Blizzard: Will my right hon. Friend assure me that in future the buildings and assets of the HMRC will not be used to collect the flat tax, which has been continually advocated by the Conservative party this morning?

Dawn Primarolo: I have been the Minister responsible for the two departments for rather a long time now. I do not know how much longer that will last, but may I say on behalf of the Government that we intend to make absolutely sure that there is not an introduction of a flat tax, which would be unfair and significantly reduce resources into the Exchequer. It does not operate in any of the substantial industrial economies. It would be a disaster for us and take us away from what is a fair and proportionate tax system that ensures that public funds are invested in line with the requirements and aspirations of our electorate.

Debt Relief

Celia Barlow: If he will make a statement on proposals for debt relief to be discussed under Russia's presidency of the G8.

Chris Bryant: What assessment he has made of the likely impact of Russia's presidency of the G8 for cancellation of debt in the world's poorest countries.

Gordon Brown: Since our last Question Time, 100 per cent. multilateral debt relief has been finally achieved for the first 19 heavily indebted poor countries, of 40 countries that are now eligible to share in the £170 billion write-off in debt. In Britain's view, however, all 67 of the poorest countries of the world should have debt reduction. By paying our share of their debt service, we will unilaterally lead debt collection for those non-HIPCs, and when I am at the G8 in Moscow I will urge other countries to follow us.

Celia Barlow: I am proud of the many achievements in international development secured under our stewardship of the G8 last year. However, those should be seen as merely one important step along a long road. Can my right hon. Friend outline what he is doing to keep those issues at the top of the agenda during the Russian presidency, and what are the prospects of future successes for the world's poor this year?

Gordon Brown: I am grateful to my hon. Friend. She has done a huge amount in her constituency to make people more aware of these important issues. Indeed, around the country hundreds of thousands of people are campaigning for greater debt relief. I will meet other Finance Ministers at Davos tomorrow when we shall undertake a session on this very set of issues. When the G8 meets in Moscow on 14 February I will propose that we go further on debt relief. We will pay 10 per cent. of the share of the debt interest payments of the non-HIPC countries—that is more than 30 countries who are not in the first list for debt relief, but who in our view should receive debt relief. Other countries, including Canada, have already announced that they will do likewise. We are trying to persuade yet other countries that this is the right step forward. Although we have had an enormous advance in the past few months, with multilateral and bilateral debt relief agreed at 100 per cent. for some of the poorest countries in the world, there is still a great deal more to do. Our aim is that nearly 70 countries will receive the debt relief that is necessary for them to begin their economic reconstruction.

Chris Bryant: Largely thanks to this Government's determination to get a better deal for the poorest countries in the world, we have seen an amazing turnaround in the last 10 years in international public opinion on debt relief. Does my right hon. Friend the Chancellor worry a little, with changes of Government in some G8 countries, particularly with Conservatives coming to power in Canada, that sometimes Conservatives are a little Johnny-come-lately on these issues? They say a lot of things, but then never put them into practice. Earlier, my right hon. Friend talked about the missionary work of Sir Bob Geldof. Will he be undertaking it with the Conservatives in Canada?

Gordon Brown: That is all the more reason for the missionary work about which I talked earlier. I am sure that it could be effective over a period of time. Let us not forget when we are facing up to problems that involve public expenditure that the last Conservative Government halved overseas development aid; we have now doubled overseas development aid. If the Conservatives are going to support us in increasing overseas development aid, I welcome that, but it means a commitment of additional resources to enable poorer people in the world to have education and health.

Julie Kirkbride: In relation to the G8, I was delighted to hear what the Chancellor said earlier about free trade and the importance of allowing countries to trade their way out of poverty. To that end, what negotiations has he had with his erstwhile friend, or perhaps foe, Commissioner Mandelson, whose support for French farmers seems to be one of the principal obstacles to freer trade in the world today?

Gordon Brown: I think we know that the European Union has made proposals which reform the agricultural policy, but that more must be done. I was describing how, at the G8 meeting in December, India and Brazil joined our discussions and made proposals to modify their position, subject to America and Europe looking at theirs. It is important over the next few weeks that America and Europe look at their position and see whether they can make the concessions that are necessary for a trade agreement to take place. Again, I hope that there will be all-party support for this.

Damian Green: In recent years the G8 has quite properly concentrated on African debt relief. The Chancellor will be aware that in other parts of the world, notably eastern Europe, there are countries afflicted by poverty and debt. It would be particularly ironic if during the Russian presidency of the G8 those countries continue to suffer, especially as many of their economies—Ukraine and Moldova spring to mind—have been damaged by Russia's recent actions which not only threatened the cut-off of gas supplies, but the growth potential of their economies. Will the Chancellor ensure that during the Russian presidency that country does not continue to try to bully its poor neighbours, but concentrates on debt relief in that part of the world as well?

Gordon Brown: Sometimes it is difficult to see the connection that the hon. Gentleman is making between debt relief and Russian policy towards Ukraine. Two of the countries to receive debt relief under the proposal passed by the International Monetary Fund board and the World Bank board are eastern European countries. They will benefit from the measures that we are taking.
	As for countries toward the east of Europe, it is remarkable that some of the poorest countries, which have now joined the European Union, are prepared to contribute aid themselves. That is a welcome sign. We will of course look at the debt relief proposals of other eastern European countries, but the priority countries are obviously those that, according to income per head, are the poorest in the world, and they are mainly in Africa, Asia and Latin America.

Public Finance Forecasts

James Duddridge: What measures he is taking to improve the reliability of public finance forecasts.

Des Browne: Since 1997, the Government have introduced a number of changes that have improved forecasting performance. They include the introduction of reasonable and cautious assumptions, independently audited by the National Audit Office. The Treasury regularly reviews its fiscal forecasting performance and publishes the results in end-of-year fiscal reports. They demonstrate that the Treasury's forecasts since 1997 compare well with those of major international organisations and of other EU member states.

James Duddridge: Does the Chief Secretary agree with the Treasury Committee, which said:
	"It is important that official forecasts for tax receipts avoid any systemic bias either to exaggerate or underestimate revenue receipts, particularly towards the end of the economic cycle when forecasts are likely to come under particular scrutiny"?

Des Browne: I do agree with that. I have yet to have the advantage of reading all the Treasury Committee's report on the pre-Budget report. However, it was precisely in order to achieve that objective that we went to the trouble of introducing rules and a level of independence concerning the assumptions that underlie such forecasts.

Andrew Love: Can my right hon. Friend explain to the House the impact on public finance forecasts of the possible introduction of a flat tax?

Des Browne: As everybody knows, a flat tax would be significantly expensive in terms of the damage that it would do to this country. Some estimates suggest that if a flat tax were operating now, much-needed investment in public services would be reduced by as much as £7 billion for this year alone. I understand that the Conservatives, some of whom advocate a flat tax, are keeping their powder dry on this issue—or trying to—but it is hardly likely that it will remain dry for very much longer, given that they have put Michael Forsyth in charge of consideration of taxation. Of course, and as Scotland knows, he is the ultimate flat-tax—

Mr. Speaker: Order. We are going beyond the question.

Christopher Huhne: May I ask the Chief Secretary—[Interruption.]

Mr. Speaker: Order. I called the hon. Gentleman because he is a Back Bencher, and for no other reason. Please listen to him.

Christopher Huhne: Thank you, Mr. Speaker, for that promotion. May I ask the Chief Secretary carefully to consider the course of action promoted by my hon. Friend the Member for Twickenham (Dr. Cable), who points out that the issuance of long-dated Government debt would of course improve the reliability of public finance forecasts? Does the Chief Secretary recognise that not increasing such issuance would constitute a substantial threat to the sustainability of pension funds?

Des Browne: First, Mr. Speaker, without wishing to encourage your wrath, may I recognise that the hon. Gentleman is, I think, his party's shadow Chief Secretary to the Treasury and is in fact speaking from the Front Bench?

Mr. Speaker: Order. I am going to make something plain. I called the hon. Member for Eastleigh (Chris Huhne) as a Back Bencher, not as a spokesman. There is only one allocation to the Liberals.

Des Browne: I apologise, Mr. Speaker—I should have known better than to try to be that clever. I am glad to hear from the hon. Member for Eastleigh (Chris Huhne) today. He is perhaps the only candidate for the leadership of his party whom we have not heard from this week, so I am pleased that he has had an opportunity to say something. In answer to the question, I assure the hon. Gentleman that the Government appreciate his point. That is exactly why my right hon. Friend the Chancellor has introduced appropriate mechanisms.

Andrew Miller: But will my right hon. Friend explain the difference between the mechanisms in place now and those that applied on Black Wednesday? Could it be that my right hon. Friend the Chancellor has better special advisers?

Des Browne: It is substantially because this Government have learned from the mistakes of the previous Administration. When we came to power in 1997, we set out principles for fiscal management and a code for fiscal stability. We have implemented significant changes that have helped to deliver improved forecasting performance. They include, for example, the publication of full fiscal projections at each PBR and Budget that are based on all Government decisions and circumstances that may have a material impact on the fiscal outlook, the audit of key assumptions—in particular the cautious assumptions for trend growth—and the publication of a full backward-looking analysis of forecasts in the end-of-year fiscal report.

Mark Hoban: In 1995, the then shadow Chancellor called for an independent audit of the sustainability of public expenditure and the golden rule. What progress has the sixth Chief Secretary to the Treasury since this Government came to power made in that regard?

Des Browne: I have already set out the rules that we have introduced. What the hon. Gentleman is arguing for requires consideration of where the proper political accountability for such decisions lies. My right hon. Friend the Chancellor has made it clear that the Government are accountable for the decisions that they announce to this House.

Manufacturing Industry

Michael Fabricant: What recent assessment he has made of the competitiveness of UK manufacturing industry; and if he will make a statement.

Des Browne: The pre-Budget report provided an assessment of all areas of the UK economy, and action taken by the   Government to provide the right environment forbusiness competing in a global environment. Manufacturing productivity in the UK rose by 30.9 per cent. between 1997 and 2004. The Government want a successful and dynamic manufacturing sector with more companies moving to high-value production to meet the challenge of globalisation, for which the best foundation is, of course, macroeconomic stability.

Mr. Speaker: I call Mark Hoban. [Interruption.] My apologies; I meant Mr. Fabricant.

Michael Fabricant: We look so alike, Mr. Speaker, that getting us mixed up is easily done.
	I know that the Chief Secretary will join me in offering sympathy to the 175 workers at GKN Lichfield who have just lost their jobs because the company is moving its manufacturing plant from the UK to Europe. However, that is not so surprising, given that the Engineering Employers Federation has said that extra taxes placed on manufacturing directly amount to £2.2 billion since 1997, and that the total for extra taxes in that period comes to £5.5 billion. That compares with what has happened in Europe and the US, where the overall tax burden has fallen since 1997. What can the Chief Secretary do to reverse that trend?

Des Browne: First, may I take the opportunity to express my condolences and support to the workers at the GKN Lichfield plant, which is now to be closed? My understanding of the situation is not exactly the same as the hon. Gentleman's. We are dealing with his constituency and I accept that I may be wrong, but I understand that GKN announced at the same time that it would relocate all the jobs to its 10 other UK plants. That is not entirely consistent with what the hon. Gentleman said, but I recognise that he will have more accurate information.
	The loss of manufacturing jobs in the west midlands and the rest of the UK has been going on for some time, but I point out that the service sector in the west midlands has expanded significantly, with more than 300,000 jobs created since we have been in government. Job opportunities exist, and I assure the hon. Gentleman that the Government will support the people who have lost their jobs today.
	In relation to the meat of the hon. Gentleman's question, I suggest that his analysis of why this is happening is slightly skewed. I understand why, for political reasons, he wants to skew it, but corporation tax has gone down in this country from 33 per cent. to 30 per cent. We support manufacturing industry through research and development credits, 80 per cent. of which go to manufacturing industry.
	The global challenge that we all face in relation to manufacturing will have to be met by a number of activities, and most of those my right hon. Friend the Chancellor announced in the pre-Budget report.

Michael Foster: Cadbury's is a highly competitive manufacturer of chocolate based in the west midlands. Does my right hon. Friend understand the dismay felt by workers in our region that Opposition Members have signed an early-day motion urging people to boycott the products—

Mr. Speaker: Order. I was doing the hon. Gentleman a favour by calling him late in the day, but he is out of order.

Business of the House

Theresa May: May I ask the Leader of the House to give us the Business for the next week?

Geoff Hoon: The business for next week will be as follows:
	Monday 30 January—Conclusion of consideration in Committee of the Government of Wales Bill.
	Tuesday 31 January—Consideration of Lords amendments to Racial and Religious Hatred Bill, followed by a debate on pensions on a motion for the Adjournment of the House.
	Wednesday 1 February—Opposition Day [12th Allotted Day]. There will be a debate on police force amalgamations, followed by a debate entitled "Failure of the Government's 10-Year Transport Plan". Both arise on an Opposition motion.
	Thursday 2 February—A debate on defence procurement on a motion for the Adjournment of the House.
	Friday 3 February—The House will not be sitting.
	The provisional business for the following week will be:
	Monday 6 February—Motions relating to the police grant and local government finance reports.
	Tuesday 7 February—Opposition Day [13th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
	Wednesday 8 February—Business of the House motion, followed by motions relating to parliamentary allowances and financial assistance for the representative work of Sinn Fein.
	Thursday 9 February—Second Reading of the Legislative and Regulatory Reform Bill.
	Friday 10 February—The House will not be sitting.
	I should also like to inform the House that the business in Westminster Hall for 2 and 9 February will be—
	Thursday 2 February—A debate on employer engagement in further and higher education.
	Thursday 9 February—A debate on the report from the Health Committee on new developments in sexual health and HIV/AIDS policy.

Theresa May: Last week I asked the Leader of the House for an early statement on troop deployments in Afghanistan. That statement of course will be made today, and I should like to thank the Leader of the House for the alacrity with which he responded to my request. Dare I say it, this could be the start of a beautiful relationship—[Hon. Members: "Ooh."]—that is, of course, unless it is rudely interrupted by a Cabinet reshuffle.
	Talking of which, as we have Cabinet Office business in the House in a couple of weeks, will there be a Chancellor of the Duchy of Lancaster in post by then? If not, I have a suggestion for the Government. Perhaps the money saved could be used to pay the Minister for women and equality. After all, a pay gap for the Minister for women and equality of 49 per cent. is hardly a good example for others.
	May I ask the right hon. Gentleman to give us the date of the Budget?
	Given the constitutional implications of the Government of Wales Bill and the fact that so far only a quarter of the Bill has been discussed in Committee on the Floor of the House, will the Government give consideration to a further day of Committee debate on the Bill?
	The Health Secretary's statement yesterday showed that Ministers have lost financial control in the NHS. Will she come to the House to make a statement on the financial position of the NHS? We heard only today of a hospital serving the constituents of my hon. Friend the Member for Tunbridge Wells (Greg Clark) which, as in the "Yes, Minister" sketch, seems to think that it is okay to pay staff to keep operating theatres open but then cancel operations and leave theatres lying empty. May we have a debate in Government time on health issues and their impact on patients?
	Last week there was an excellent debate on international development matters. Given the importance of the issues that the Department for International Development deals with, and the fact that its budget is now larger than that of the Foreign Office, will the Government consider giving more time to oral questions for DFID?
	Finally, we now know that the Government's scheme for bus passes is giving real problems to local authorities, that libraries are being closed across the country because of financial problems and that the Office of the Deputy Prime Minister has spent £168 million on consultants advising on knocking down 168,000 houses. A survey of experts involved in the Thames Gateway found that only 13 per cent. described the Deputy Prime Minister's leadership as "effective or broadly ok". Today, a Select Committee report accused the Department of double counting on efficiencies and reported that 10 per cent. of staff felt bullied in the last year, and an earlier MORI opinion poll of Government officials said that the ODPM was lacking leadership and comparable to a "pantomime horse". Given that under this Government council tax has risen by 76 per cent., may we urgently have a debate on the burdens placed by Government on local councils and the implications for council tax payers?

Geoff Hoon: I am at least grateful that the right hon. Lady's shopping list today is shorter than it was last week—

David Heath: Not a lot.

Geoff Hoon: Well, I will leave others to judge whether it is a lot shorter: it is at least shorter. I am delighted to have the opportunity again to pay tribute to my hon. Friend the Under-Secretary of State for the Cabinet Office for the excellent work that he is doing on behalf of the Cabinet Office and the excellent way that he comes to the House to answer questions. I am sure that he is earning every penny, as is every other Minister.
	The question of financial control in the NHS is of course routinely raised by Opposition Members and I understand why they have concerns about financial management in their local hospitals. Some three quarters of NHS bodies are in balance or in surplus and it is important to the Government that that should apply across the country. I am always slightly surprised when Opposition Members raise such issues, because if the Government were not tackling the question of the deficits in NHS bodies, they would all rise in righteous indignation to complain about that. We are of course tackling the problem and my right hon. Friend the Secretary of State has announced measures to assist those organisations to achieve financial balance and surplus. That applies just as well in Tunbridge Wells, and I was able to listen this morning to the chief executive of the primary care trust giving an extremely satisfactory explanation of the position. I suspect that the right hon. Lady did not hear that, because if she had, she might not have raised the issue today.
	As for international development matters, it is important to devote the appropriate time to the very important work that the Department does on behalf of the United Kingdom, but if more time is made available for that, less time is available for other issues. That is the balance that must always be struck in the House.
	The right hon. Lady also mentioned housing. I cannot resist making the point that investment in housing has risen from some £1.65 billion in the last year of the Conservative Government to more than £5 billion now. That is an astonishing improvement. It means that housing has been improved across the country. It also means that some housing has been demolished, but that is because that housing is incapable of being improved. Where it is possible to improve housing, it is being improved, but where demolition is necessary, there are demolitions. The space can then be used for better housing for people in the areas affected. There will be an opportunity next week for all hon. Members to ask questions of my right hon. Friend the Deputy Prime Minister on Wednesday, and I am sure that there will shortly be an opportunity to deal with matters affecting the NHS.

George Mudie: The Leader of the House will be aware of the questionable decision to withdraw support from Post Office accounts. That will leave 4.5 million pensioners stranded, the majority of whom were persuaded to give up pension books on the basis that Post Office accounts would be available. With no bank nearby, they will not be able to get their money. The decision will also put the viability of inner-city and rural post offices in question. Will the Leader of the House arrange an early debate and at least draw the matter to the attention of his Cabinet colleagues?

Geoff Hoon: My hon. Friend is right to raise what is an important issue, especially because it affects pensioners. I know that the matter has continued to cause great concern to hon. Members. I assure my hon. Friend that the arrangements that he describes are interim measures and that the Government are examining the ways in which the support that rightly must be given to pensioners is made available. I shall also ensure that his concerns are brought to the attention of my right hon. Friend the Secretary of State and that he is contacted directly.

David Heath: The hon. Member for Leeds, East (Mr. Mudie) is absolutely right and I am afraid that the Leader of the House's answer to his question was entirely complacent. Recent parliamentary replies reveal that 5 million people use Post Office cards each week, and the revenue to the post office network is £1 billion, so the Department for Work and Pensions proposes to scrap them. That will have a real impact on sub-post offices, so we need an urgent debate on the matter.
	I also support the view that there should be a debate on health, not only to deal with the efficiency and effectiveness of health expenditure—I remind the Leader of the House that hospitals are there not to make surpluses, but to treat patients effectively and efficiently—but to deal with the issues raised by the Public Accounts Committee report on cancer, which shows that there are huge inequalities throughout the country.
	May we have an early debate on the report—or should I say reports—of the Education Committee, which we anticipate will be published this evening? It would be extremely useful to know whether Labour Members support the Prime Minister, whether Conservative Members support the Prime Minister, whether Conservative Members support their position of only a few weeks ago—whatever. Such a debate would be a good expedition so that we could discover people's thoughts before the publication of the education Bill.
	Lastly, may we have a debate on the Arbuthnot report? Many see it as a missed opportunity, but it is nevertheless of great importance to many Scottish Members. It would be useful if the House had the early opportunity—[Interruption.] The Leader of the House does not know what the report is about. That is unfortunate, but no doubt he will be briefed if I carry on talking long enough.

Geoff Hoon: I do express considerable disappointment about the hon. Gentleman's decision not to stand as a candidate in the leadership election of the Liberal Democrats. All of us who routinely attend business questions on a Thursday devoted considerable effort to trying to persuade him to participate in what is quite a narrow race. There was a remarkable shortening of his odds. As I reported to the House, at one stage he was as far out as 100–1, and hon. Members piled in at those generous odds. The odds came down considerably, but he still resisted the opportunity that was made available to him. I hope he understands that I am answering his questions with the spirit of disappointment that is shared by all hon. Members, although sadly, apparently, not those in the Liberal Democrats, but then one cannot have everything.
	I made it clear that the post office issue is important. All hon. Members face the problem in their constituencies. Pensioners and others throughout the country are affected, so the Government are determined to get the situation right.
	The Government are delighted to debate health issues. We would be delighted to debate them every single day of the week, if only there were time, not least because we have a remarkable record of success on increasing available funding massively, dramatically reducing waiting lists and ensuring that the national health service is a national health service of which the country can be proud.
	The hon. Gentleman made reference by implication to a recent report of the Public Accounts Committee. I thought that I might read him an extract from the report. It says that
	"across the country significant improvements have been made in improving cancer services and managing them more effectively, in particular, speeding access to cancer diagnosis and treatment."
	There is not a doctor in the country who does not recognise that there has been significant improvement, but that is not to say—no one on the Government Benches would in any way suggest—that there is not still more to be done. We are committed to improving the position, and certainly remedying inequalities.
	I am sure that in due course there will be significant opportunities for debating education. I am sure that all hon. Members will welcome that. I can confidently say that that will be happening sooner rather than later.
	When I find out what the Arbuthnot report is, I will ensure that the hon. Gentleman is written to about it.

Barbara Follett: Will my right hon. Friend give serious consideration to holding a debate to mark international women's day, which this year falls on Wednesday 8 March?

Geoff Hoon: My hon. Friend has raised this subject with me on a previous occasion. I know that the request will have wide support around the House. I will try to consider the request favourably, but I cannot guarantee that time can be found to hold the debate on the Floor of the House on the appropriate date. I can assure my hon. Friend that we will find time for a debate, perhaps in Westminster Hall.

Owen Paterson: May I pick up the points of the hon. Members for Leeds, East (Mr. Mudie) and for Somerton and Frome (Mr. Heath) about sub-post offices and the impact of withdrawing the benefits card? I was involved in this at meetings with Ministers, on a constituency basis and in working with the all-party group. At no stage was it ever mentioned that the card, despite all the Government's attempts to bully people into direct payments, once established, would not be permanent. Driving down on Sunday, I heard some form of ministerial pond life suggesting that the card was only temporary. [Interruption.] I did not catch the Minister's name. I am amazed that the Leader of the House says that it was intended to be a temporary scheme. At no stage was it ever discussed. I rang Colin Bateman of the National Federation of Sub-Postmasters on that basis. Could we please have a statement—

Mr. Speaker: Order.

Geoff Hoon: I can see that we are going to have an interesting linguistic debate. The word that I used was "interim" rather than "temporary". The hon. Gentleman has used the word "temporary" to suggest somehow that the scheme was always designed to come to an end, with the risk that somehow it would fall over the edge. Temporary arrangements have that sort of feeling. If the hon. Gentleman had used the word "interim", which was the word that I used, he would recognise that we were talking about moving from one sensible arrangement to another. I know that the use of that language might appear to be something that the hon. Gentleman would not entirely share. If he thinks about the matter carefully, he will agree with what I have said.

John Spellar: May I draw my right hon. Friend's attention to early-day motion 1479?
	[That this House recognises the pleasure given to early rising listeners to BBC Radio Four by the subtle and evocative medley of British folk tunes in Fritz Spiegl's UK Theme which starts daily broadcasting and has become embedded over the years in the affections of listeners; and urges the BBC to reconsider its decision to drop this popular medley and to continue to use the UK Theme in the proud place it has occupied with such success and charm for so many years.]
	The motion has received support across the House. Interestingly enough, it now has support from my right hon. Friend the Chancellor of the Exchequer and the previous Home Secretary, my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett). In the light of that, can my right hon. Friend arrange an early debate so as to get some sense into the BBC management for restoring the UK theme to Radio 4?

Geoff Hoon: The one thing that I notice about this particularly important debate is that it divides those who get up early from those who stay in bed. I know well from my hon. Friend's time in the Ministry of Defence that he is an early riser. I have always been impressed by how well the theme was put together. It is certainly a startling beginning to the day. It is important that people who are listeners to Radio 4 at that time in the morning are given the opportunity of expressing their views clearly. Unfortunately, I suspect that many people who are not up at that time in the morning are also expressing their views.

Stewart Hosie: The Leader of the House may be aware that the Scottish quarterly GDP figures were published yesterday, which are equivalent to the UK index of production. The figures show three consecutive quarters of falling manufacturing output, the manufacturing recession in Scotland. Given the three consecutive quarterly falls in manufacturing output, can the right hon. Gentleman organise an early statement from a Treasury Minister to explain what more can be done to turn around the competitive situation in the Scottish economy and end the manufacturing recession?

Geoff Hoon: We have just had Treasury questions and the hon. Gentleman would have had the opportunity of raising that matter with my right hon. Friend the Chancellor of the Exchequer. I am sure that he would have received a robust and prudent answer. The Government take the position of manufacturing industry extremely seriously. We have given a great deal of support, not least in relation to training and education to provide the British people with the appropriate skills to contribute to our highly successful manufacturing industry. Where there have been closures—I know that some have recently been announced in Scotland—a significant level of assistance is given to those companies to ensure that their work force have the opportunity of retraining and developing the skills that they require to participate in an economy that is still very healthy. As I have seen in my constituency, when closures occur they are a huge shock and worry to the people affected, but in the healthy economy that we have, it is remarkable that those people are able to get opportunities of retraining and, crucially, of finding alternative employment.

Peter Kilfoyle: The Leader of the House may be impressed by the way that the UK theme is put together, but like many colleagues I am not very impressed by the way that the Criminal Records Bureau has been put together. It is a valuable resource, but it has been bedevilled by problems since its inception. Within the past couple of days in my area alone, I have come across three major bungles, including one of identity theft. Can the Leader of the House provide some space wherein we may debate how the Criminal Records Bureau is functioning, or at the very least, will he arrange for one of the Ministers at the Home Office to make a statement to the House?

Geoff Hoon: I certainly agree with my hon. Friend that it is important that everyone can rely with absolute certainty on the records and statistics compiled in relation to crime. I accept that from time to time there are difficulties in that respect. That is one of the reasons why, for example, the Home Office recently launched a review of the way in which criminal statistics are compiled. That does not entirely deal with my hon. Friend's concern about the accuracy of the information supplied by the CRB, but I know that the matter is taken extremely seriously in the Home Office and by my right hon. Friend the Home Secretary.

Greg Clark: May I support my right hon. Friend the Member for Maidenhead (Mrs. May) in her request for the Secretary of State for Health to be brought to the House to explain the crisis in NHS financing? Two weeks ago the Department of Health said:
	"There is no question of doctors being asked to play games to improve finances and we have always said that improving financial management does not mean compromising patient care".
	In Tunbridge Wells operations are not taking place and out-patient appointments are not been given, except in urgent cases, until 31 March. That is compromising patient care, and it exposes the gulf in perception and understanding between Ministers and doctors and nurses on the ground, who are very concerned about that.

Geoff Hoon: If there were the kind of crisis that the hon. Gentleman describes, Ministers and Labour Members would share his concern, but he must face up to the fact that huge sums of extra money have been put into the national health service, including in Tunbridge Wells. It is important that those responsible for managing that extra money do so successfully. As I told the House earlier, if the Government were not taking action to ensure effective control of that extra finance, Opposition Members would be complaining about it. I accept that it is important to deal with these matters. From what I heard from the chief executive of the PCT on the radio this morning, action is being taken in Tunbridge Wells to deal with the situation.

James McGovern: My right hon. Friend will no doubt be aware of the early-day motion signed and tabled by members of the Scottish National party which states that Scottish hon. Members should not vote on issues that do not directly affect Scotland. May we have a debate on that motion, which would allow the Scottish National party in particular to tell us how the Government of Wales Bill directly affects Scotland and why its Members felt compelled to vote on such burning Scottish issues as the name of the Welsh Assembly?

Geoff Hoon: My hon. Friend has made his point more effectively than I can, but as someone who believes in the Union and in the importance of the House reflecting opinion right across the United Kingdom, and who does not believe in separation and independence in the way in which the Scottish nationalists do, I believe that that is the best for this country and the best future for this country.

Peter Robinson: Will the Leader of the House reflect on the wisdom of tabling a motion for Wednesday 8 February to provide funds for IRA-Sinn Fein, and not only to provide them with the representative funds that they had on a previous occasion, but to give them a bonus of the Short funds? I expect that the Government know the outrage in Northern Ireland at the fact that at a time when IRA-Sinn Fein continue to use the proceeds of the largest bank heist ever to take place in the British Isles, and while the police are reporting the high level of criminality within the republican movement, the Government intend to reward them.

Geoff Hoon: Having just indicated my support for the Union and the importance of ensuring that the views of all parts of the United Kingdom are properly reflected in our debates here, I hope that the hon. Gentleman will accept from me that it is vital that we encourage organisations that have in the past engaged in terrorist activity to participate effectively and peacefully in the work of this country. We shall have the opportunity to debate these questions and vote on them on 8 February. This is a matter for the House to decide, and one that I am sure will be fully and thoroughly debated on that occasion.

Julie Morgan: Is my right hon. Friend aware that the Legal Services Commission has announced the ending of all its specialist support services from July this year, without there being any apparent immediate replacement? The Welsh specialist support service provides expert advice to solicitors and front-line advisers on issues such as housing, debt and welfare benefits. Those issues are all tremendously important in Wales because of the poor housing stock and the pockets of deprivation there. Will my right hon. Friend arrange a debate on this matter, so that we can discuss whether this decision can be reversed? It is causing extreme concern in Wales.

Geoff Hoon: I am grateful to my hon. Friend for raising this issue. It is a matter with which I am familiar from previous ministerial responsibilities, and I know how important such specialist advice services are. I will certainly ensure that the Minister of State, Department for Constitutional Affairs, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), is made aware of my hon. Friend's concerns.

John Bercow: May we please have a debate on brain tumours, with particular reference to early-day motion 1424?
	[That this House notes that 16,000 people, including 450 children, each year are diagnosed with brain tumours; is disturbed that brain tumours have become the biggest single disease killing children; acknowledges that survival rates have not increased in line with the rate for childhood leukaemia and some other adult cancers; applauds the work of scientists and clinicians; supports the efforts of United Kingdom brain tumour charities which support research and raise awareness of issues surrounding brain tumour care; further notes that NHS expenditure on brain tumour patients is well below that devoted to other cancers; recognises the problems faced by brain tumour patients in accessing treatment; seeks improved NHS funding and care, including approved access to radiotherapy and rehabilitation services and treatments, such as carmustine implants and temozolomide, which are better tolerated, offer the best hope of improved survival and/or rehabilitation; and calls upon the National Institute for Clinical Health and Excellence to act quickly to approve clinically and cost effective new treatments so that they are available to all NHS patients.]
	Given that 16,000 people a year are diagnosed with brain tumours, and that such tumours have now overtaken leukaemia as the biggest single cancer killer of children, would the Leader of the House accept that a debate on the matter would allow hon. Members to express their concern at the preliminary recommendation of the National Institute for Health and Clinical Excellence that carmustine implants and temozolomide should not be used in the treatment of newly diagnosed high-grade glioma? There is widespread concern about this issue, and the denial of such treatments would be a savage blow. The matter ought to be aired fully on the Floor of the House, sooner rather than later.

Geoff Hoon: The hon. Gentleman has made his point with his characteristic fairness and shown detailed knowledge of the issue. I suspect that, now that he has done so, we shall not need a debate on the subject. Nevertheless, I assure him that that matter is taken extremely seriously by the Government. We have sought always to support hon. Members' concerns about the way in which treatment in the national health service is distributed. There will be an opportunity for the hon. Gentleman to raise the issue again next week in Health questions. This issue is always taken very seriously by the Government.

David Chaytor: If it were possible to have a debate on international women's day, as my hon. Friend the Member for Stevenage (Barbara Follett) suggested, it would provide an opportunity to press the case for proper payment for the post of Minister for Women and Equality. It would also provide an opportunity to remind the House that, until very recently, the Tory shadow Minister for Women and Equality was actually a man.
	What I really wanted to ask my right hon. Friend was whether he would endorse the calls for a debate on the Post Office, and particularly on the way in which it renews its franchises. My constituency has been without either a sub-post office or a main post office for nine months, in spite of frequent correspondence between me and the Post Office, and between the leader of the local council and the Post Office. Does my right hon. Friend agree that that is completely unacceptable? May we have a debate on the Post Office to consider all these controversial issues?

Geoff Hoon: I think it is fair to say that questions of ministerial remuneration are above my pay grade—one step above my pay grade, anyway. Nevertheless, I will certainly ensure that that matter is drawn to the attention of the appropriate person. On the question of post offices, I do not believe that I can add to what I have already said to the House on that matter. It is an important issue, and the Government take it very seriously. It has been an issue over a number of years, and I believe that the Government have found the right   answer, but that answer will need to be updated in the light of changing circumstances. That is the Government's position.

Lorely Burt: May we have a debate on the level and allocation of this year's revenue support grant for local government? It cannot be right that some of the most deprived areas in the country, in the borough of Solihull, receive £237.86, while next door in Birmingham the rate is almost double at £560.40. We need a debate on the Floor of the House so that we can discuss that gross imbalance in local government finance.

Geoff Hoon: It will take place on 6 February.

Lindsay Hoyle: Will my right hon. Friend allow a debate on Lancashire county council's disgraceful proposal to withdraw funds for hot meals from the Women's Royal Voluntary Service? Thousands of volunteers in Lancashire go out to ensure that old-age pensioners have a hot meal during the week. It is not just the hot meal that those pensioners require; it is the contact with those who visit. All that is being put at risk for the sake of a few thousand pounds.

Geoff Hoon: I share my hon. Friend's admiration for the excellent work of the meals on wheels service. It does a tremendous job up and down the country, and I am sure that it does a tremendous job in Lancashire. My hon. Friend has made his point, and I entirely agree with him.

Grant Shapps: Jack Saywood, a 14-year-old in my constituency, found that his details were on the national DNA database, although he had committed no crime whatever. It was purely a case of mistaken identity. I was shocked to discover that 24,000 other people were in exactly the same position—all of them children who had never committed a crime. Their details should be removed from the database. Will the Leader of the House ask a Minister to come to the House and tell us when they will be removed?

Geoff Hoon: I have seen a number of references to the issue in the media. The hon. Gentleman has been assiduous in raising the case of his constituent and other such cases. My right hon. Friend the Home Secretary is currently considering the matter.

Rob Marris: The Leader of the House may know that some avaricious train operating companies are talking of getting rid of saver tickets. The first-class return fare from my constituency is about £182, the standard return fare is about £105, and the saver ticket—which I try to buy to save the taxpayer money—costs £37.50. May we have an early statement from the Secretary of State for Transport?

Geoff Hoon: I have seen a number of rather mischievous headlines on the subject, and I have had cause to discuss it with my right hon. Friend the Secretary of State. I understand that the Department for Transport remains committed to saver tickets and to off-peak travel. The Government's ambition, in which we have largely succeeded, is to ensure that more and more people use our railways, and that will continue to be the case.

John Hayes: As the Leader of the House will know, in December schools across Britain received important assessment and performance data which is considered vital both by schools and by Ofsted. It has become clear that that data was flawed and misleading. Students who received A* results at GCSE were counted as failures, and GNVQs were not included at all.
	The Department for Education and Skills has said that it will withdraw and reissue the data. I want to know from the Department—I hope that the Leader of the House will arrange for a statement accordingly—how that fundamental error occurred and what it has cost the taxpayer. I also want to elicit an apology to allthe teachers and students whose efforts and achievements were disregarded by the Government, and, if I may, the definition according to a simple—[Interruption.]

Mr. Speaker: Order. If it helps the Leader of the House, I know that the hon. Gentleman wants a dictionary definition.

Geoff Hoon: I am grateful for your consideration, Mr. Speaker. Perhaps the hon. Gentleman will drop a note to my right hon. Friend the Secretary of State for Education and Skills, whose responsibility that is. I take entirely seriously the concerns that the hon. Gentleman has expressed. This needs to be thoroughly looked at and investigated, and I am sure that my right hon. Friend will be contacting him about it.

David Drew: May I refer my right hon. Friend to early-day motion 1481, which refers to the dispute within the Department for Work and Pensions?
	[That this House notes with concern that members of the PCS trade union working in the Department for Work and Pensions (DWP) have felt that they have no other option but to take industrial action in the face of the Government's proposals for 30,000 job cuts and the adverse effect this is having on the DWP's services; further notes the staffing requirements of the Government's incapacity benefit reforms and that the DWP is running ahead of its job reduction target having already cut 15,000 jobs; and therefore calls upon the Government to introduce a moratorium on job cuts within the Department to enable an objective assessment to take place, in full consultation with the unions and service users concerned, of the DWP's staffing needs for delivering services.]
	Today and tomorrow, a number of members of the Public and Commercial Services Union are out on strike because of the job cuts that have been imposed in their Department. Is it not appropriate that we discuss those job cuts in this place, ensure that union members are properly consulted and treated with dignity, and, more particularly, realise that those who use jobcentres and other such services within the benefit service need the best reception from people working in the service? Maybe this is not the way to go ahead. We should treat those people with dignity, because disputes do not help anyone.

Geoff Hoon: My hon. Friend is right. It is important that those who provide a vital public service are properly consulted. As I understand it, they have been. It is important that we ensure that proper support is given in the important work that they do, but may I make it clear to him that the adjustment in numbers in the service is directly the result of the significant reduction in unemployment and the significant technological improvements in the delivery of the service? I am sure he accepts very fairly that the money we devote to the Department is best paid to those who are in need of its assistance. That has to mean a balance between those who work in the service and, crucially, those who receive the benefits. Obviously, the more money available for benefits, the better the service will be.

William McCrea: Can the Leader of the House find time for a debate on the review of public administration in Northern Ireland? The Government propose to remove the 26 borough, city and district councils and replace them with seven regional councils. That proposal is supported only by Sinn Fein-IRA. When will the Government unlock themselves from Sinn Fein-IRA and back the democrats?

Geoff Hoon: May I invite the hon. Gentleman to stand back a little from the rhetoric and consider the proposal? I will give him the same answer that I have just given my hon. Friend the Member for Stroud (Mr. Drew): in the delivery of all public services, whether national services of the kind dealt with by the Department for Work and Pensions or local government services, it is crucial that as much as possible of the money provided by the taxpayer is spent on the service, and as little as possible on unnecessary bureaucratic support. The more sensible and rational the delivery arrangements, the better it is for his constituents and those of all Members of the House.

Clive Betts: Can my right hon. Friend arrange an early debate on the future of regional casinos? Before the election, the House concluded that there could be regeneration benefits from such casinos and that we should run a pilot scheme, but, unfortunately, we agreed that that pilot should be simply one project. I am not sure that I could find one Member of the House who now thinks that one is the right number. What might work in an old industrial area such as the lower Don valley in my constituency will not necessarily work in seaside resorts or in London. Can we have a debate so that we can reach a sensible conclusion? Yes, we should have a pilot project, but the number involved should be eight, not one.

Geoff Hoon: I am grateful to my hon. Friend for raising that issue. I recognise the importance of those questions for a number of areas that are looking to achieve the regeneration benefits that the provision of larger casinos can provide. I assure him that I will ensure that my right hon. Friend the Secretary of State for Culture, Media and Sport responds to him directly.

Bob Spink: The right hon. Gentleman is an excellent and assiduous Leader of the House, so he will be aware that there is rising public concern about the funding of children's hospices. I know he will be sympathetic to this concern as well: some children's hospices get just 2 per cent. of their funding from the authorities, the rest having to be raised through charitable good-cause work by excellent volunteers. Is he expecting the Secretary of State for Health to come to the House in the near future to make an announcement on Government policy changes on the funding of children's hospices?

Geoff Hoon: I am grateful to the hon. Gentleman for his comments, surprising though they are, and for raising that issue. I have been routinely involved not in the question of children's hospices, but in supporting a local hospice. I know—he put it better than I can—the excellent work done by volunteers, with the support of the national health service, in hospices up and down the country. He is right to draw attention to the work that they do.

Keith Vaz: Could we have an early debate on the progress of the Lisbon agenda? In six weeks' time, there will be a European business summit, at which EU leaders will look at the progress of the agenda over the last five years. We have reached seven of the 17 quantifiable benchmarks, whereas France has reached only three. Could we have a debate on this important issue?

Geoff Hoon: My hon. Friend worked assiduously as an effective Minister for Europe in promoting the Lisbon agenda, something that has been at the top of the Government's agenda for the EU. Providing that we continue to concentrate on the forward-looking programme that Lisbon set out—not least because it emphasises the importance to Europe and the EU of concentrating our scarce resources on investment in skills and training and on the challenge of competing with far-eastern economies—that is still the Government's agenda, and we want to see progress. But, obviously, we must persuade our partners to put the same emphasis on it as we do.

Tim Loughton: Despite being dropped from yesterday's business, and despite the fact that we finished in Committee early, back in mid-December, the Childcare Bill still does not feature in forthcoming business. Will the Leader of the House explain why that business was mysteriously dropped and replaced with a Bill that collapsed early yesterday in any case? Also, the Children and Adoption Bill, which left the other House back in November, still has to rear its head in this House. When might we see it? May I return yet again to the subject of the Mental Health Bill, which for three years has been in draft form one, draft form two and at the pre-legislative Scrutiny Committee stage, and still we have no mention of it? Is it going to appear in this Session or not?

Geoff Hoon: I take the hon. Gentleman's observations as being a considerable tribute to the energy, hard work and determination of the Government in passing a whole series of important measures to improve child care and mental health in this country, but each has to take its place in a crowded and busy programme, one that the Government will deliver during this Session, as we have set out. Obviously, the management of the business is a sometimes difficult and challenging task and that is something that business managers must take account of in bringing business to this House.

David Taylor: The minerals extraction and building materials industry is economically crucial to north-west Leicestershire and to the UK as a whole in the role that it plays in delivering new and improved infrastructure, public buildings, economic growth and so on. In light of the seriously slowed construction product activity in my area, is it not time that we had a debate on the progress towards the Government's key targets? There is a debate next Wednesday on transport in Opposition time. Could we have a debate on housing in Government time within the next two or three weeks? Also, what has happened to the Health Bill? Has it disappeared in a puff of smoke?

Geoff Hoon: I know that my hon. Friend would accept that the construction industry has boomed in recent years as a result of considerable Government investment in new hospitals, roads and schools, providing a range of opportunities for the industry. Necessarily that has implications for my hon. Friend's constituency. On the Health Bill, I hope not to delay my hon. Friend too long on a matter on which we will be able to give information to the House in due course.

David Howarth: I was glad to hear the Leader of the House say that he would like to see more debates on the health service in this House. May I therefore ask him for a debate on mental health services in this country, in which the Government could explain to my constituents why, yesterday, our primary care trust announced cuts of nearly £3 million in mental health funding?

Geoff Hoon: I recognise that the hon. Gentleman has taken up these issues on previous occasions and he is right to point out that, sadly, mental health has not always received the focus within the NHS that it deserves. That is something that the Government are determined to put right. I cannot answer his specific constituency point but I am sure that my right hon. Friend the Secretary of State for Health will be able to do so.

Andrew Miller: My right hon. Friend might have seen an article in The Daily Telegraph today that reports that
	"three Appeal Court judges ruled that publication of"
	certain
	"documents by the newspaper was in the public interest and that their authenticity had never been challenged."
	Would it not be helpful if those documents were made available to the Library and if we had a debate on the public interest issues to which that article refers?

Geoff Hoon: My right hon. and hon. Friends are showing more than considerable skill in bowling obscure balls to me this morning. I have not had the joy of reading The Daily Telegraph today, but no doubt I will do so in due course, and I will be able to answer my hon. Friend's question more effectively.

Ben Wallace: Some three weeks ago, the Government announced by written statement that they would begin the process of privatising Qinetiq. Today, they published the brochure, effectively, for investors. Will the Leader of the House consider having a debate or asking the Secretary of State to make a statement on the future of Qinetiq? A number of questions need to be answered, such as why members of the British public are being denied a right to buy a stake in the company when it is floated, whether it is likely that the chief executive will get a £22 million bonus for a £150,000 investment, and what protection there is from the family secrets being flogged to the highest bidder overseas.

Geoff Hoon: The hon. Gentleman could have raised all those questions in Defence questions earlier this week, but I am grateful that he has saved them up for today. Certainly, it is important that the British taxpayer gets the best value from such sales. It is somewhat ironic that Conservative Members are raising questions of privatisation in relation to something that was done in a proper, perfectly competitive way, unlike some privatisations, of which I could give him a long list. I will simply park that. What is vital is that the process delivers the best return for the British taxpayer while safeguarding important research done by British scientists. That was part of the original way in which Qinetiq was organised. As well as the return to the British taxpayer, I am sure that the hon. Gentleman would want to see that the money invested through Qinetiq delivers material that can be sold competitively and used for the greater interest of the British taxpayer. I assure him that that is the position.
	If I may deal with this point, the hon. Gentleman has revealed that he is a regular reader of The Daily Telegraph. I think that even readers of The Daily Telegraph would accept that what is important is to deliver the best return to the British taxpayer. This arrangement will do that.

Mark Lancaster: Can we have an early debate on the future funding of fire authorities? Buckinghamshire fire authority has one of the lowest precepts in the country, and yet no account has been taken by Government of the rapid expansion of Milton Keynes. In addition, the blanket 5 per cent. cap disproportionately affects low-charging authorities such as Buckinghamshire rather than higher-charging authorities elsewhere in the country.

Geoff Hoon: I have indicated that there will shortly be opportunities to discuss local government financing. The hon. Gentleman is right to raise the important issue of the fire precept. The Government keep such matters under constant review. Where there are changes in population, the ways in which financial assistance is calculated are appropriately adjusted.

Nigel Dodds: The Leader of the House will be aware that his right hon. Friend the Secretary of State for Northern Ireland has said that he is considering withdrawing emoluments and allowances to Members of the Northern Ireland Assembly, because even though they do their representative work, they do not engage in the Assembly. How on earth, therefore, can the Government justify bringing forward a motion to restore allowances, and increase them, for Sinn Fein Members for their representative work, when they do not attend the House? Will the Leader of the House give a commitment on behalf of the Government that if the Independent Monitoring Commission report confirms that, as the Chief Constable remarked recently, the IRA is still involved actively in criminality in Northern Ireland, he will withdraw the motion?

Geoff Hoon: That is an opportunity for the House to determine important questions about allowances, and I am not making observations about other institutions. My right hon. Friend the Secretary of State for Northern Ireland has made clear the importance of finding a way back to the arrangements that previously operated in Northern Ireland. I am sure that the hon. Gentleman shares that determination, but I accept his argument entirely. If organisations are not committed to a peaceful process and to democratic work, they should not be entitled to those allowances.

Mark Pritchard: Will the Leader of the House find time for a debate on laser weapons? Is he aware that they can act not only as a useful offensive weapon but as a defensive measure against incoming missiles?

Geoff Hoon: Yes, I am aware of that.

Graham Stuart: rose—

Mr. Speaker: Order. The hon. Gentleman came in very late. If hon. Members want to ask a question following a statement, including the business statement, they must come in to hear the statement. If he comes in early next week, I will call him early on.

Afghanistan

John Reid: With permission, Mr. Speaker, I would like to make a statement about the deployment of our armed forces to Afghanistan.
	Just over four years ago, on 11 September 2001, we were given a brutal lesson in the consequences of leaving Afghanistan in the hands of the Taliban and the terrorists. Since then, we in this country have been at the forefront of the international effort, under the auspices of the United Nations, to defeat international terrorism, to free Afghanistan from the ruthless grip of the Taliban and to rid the country of the menace of the terrorists and the greed of the drug traffickers.
	That will not be achieved by military means alone. Therefore, although today's statement deals with the military elements of the deployment, the British Government have undertaken an unprecedented degree of cross-governmental co-ordination to ensure that this is a fully integrated package addressing governance, security and political and social change. I am grateful for the involvement of my right hon. Friends the Secretary of State for Foreign and Commonwealth Affairs, the Chief Secretary to the Treasury and the Secretary of State for International Development.
	Last September, I visited Afghanistan. I saw for myself the real hope that the international community has brought to a new generation of Afghans: the hope that at last the Afghan people can rebuild their country, the hope that Afghanistan can take its rightful place as a country where men and women alike can live in peace and freedom, the hope for a better future.
	We cannot risk losing those achievements. We cannot risk Afghanistan again becoming a sanctuary for terrorists. We have seen where that leads, be it in New York or in London. We cannot ignore the opportunity to bring security to a fragile but vital part of the world, and we cannot go on accepting Afghan opium being the source of 90 per cent. of the heroin that is applied to the veins of the young people of this country. For all those reasons, it is in our interests, as the United Kingdom and as a responsible member of the international community, to act.
	In helping Afghanistan, we cannot look to resolve just one of those issues. Everything connects. Stability depends on a viable, legitimate economy. That depends on rooting out corruption and finding real alternatives to the harvesting of opium. That means helping Afghanistan to develop judicial systems, her infrastructure and the capability to govern herself effectively, which in turn brings stability and security.
	That is where there is a clear role for the military: helping to create and to maintain a framework of security on which legitimate Afghan institutions can grow and thrive. NATO, through its leadership of the international security assistance force, itself under the auspices of the UN, has a major role to play in making that happen.
	Thanks to NATO's leadership, ISAF has already expanded its activities to cover the north and west of Afghanistan, at the request of the democratically elected Afghan Government and with the authorisation of the United Nations. It now stands on the brink of expanding its operations into southern Afghanistan as part of a planned, pre-envisaged and phased expansion—stage 3. I believe NATO is now in a position to take those plans forward.
	Our allies are playing their part in ISAF. In the north we shall hand over responsibilities to Germany, Finland, Sweden and Norway; in the west Italy and Spain lead ISAF, and Lithuania and the US also provide forces; and in the south the US, Canada and Romania already have troops stationed, Estonia has pledged forces, the Danish Parliament is examining a proposal to send forces—I spoke to its Minister this morning—and we are optimistic that the Dutch, whose Minister I also spoke to this morning, will also deploy forces. In addition, Australia and New Zealand may provide forces. This truly is and will be an international, multinational effort. On the ground and in the air, this is a truly multidimensional, international force. The US, for example, has offered to provide attack helicopters and support helicopters, and we know other countries are considering providing fast jets and transport aircraft.
	We need that broad level of international support as the context in which to commit our British troops. We need the capabilities and the forces because ISAF expansion is no easy or small task in stage 3. Southern Afghanistan is undeniably a more demanding area in which to operate than either the north or the west. The Taliban remains active. The authority of the Afghan Government—and the reach of their security forces—is still weak. The influence of the drugs traffickers, by contrast, is strong.
	ISAF must be prepared to meet these challenges. It means different forces and it may mean different tactics—not because we want to wage war: that is not our aim. Provincial reconstruction teams, building up Afghanistan's capacity, will remain at the core of ISAF's expansion into the south, just as it was in the north and west. But just as the threat is greater, so must be our ability and willingness to deter and defend ourselves against attack. The capabilities and experience of our armed services, to whom I again today pay tribute, make us well placed to help ISAF do both.
	We have previously announced our decision to deploy the headquarters group of the Allied Rapid Reaction Corps to lead ISAF from May 2006 to February 2007. ISAF, via NATO, will be under a British commander, General Richards. It will be supported by elements of 1 Signal Brigade, including troops from 7 and 16 Signal Regiments and the Allied Rapid Reaction Corps Support Battalion. This alone means a commitment of over 1,000 troops towards the headquarters based in and around Kabul.
	We are also preparing for a deployment to southern Afghanistan. Next month 39 Regiment, Royal Engineers will deploy to Helmand province to build an encampment for our main deployment. A company from 42 Commando Royal Marines will provide protection and three CH-47 Chinook support helicopters from 18(B) Squadron, Royal Air Force, will offer essential lift and mobility in Afghanistan terrain largely without roads. All told, between now and July we shall send some 850 additional personnel to help prepare for our main deployment. That main deployment will have at its heart a new British-led PRT at Lashkar Gar, the capital of Helmand province. As in the north, the PRT will be based on a triumvirate of the British military commander, and officials from the Foreign and Commonwealth Office and from the Department for International Development respectively. So we are working to ensure that we provide Afghanistan with a seamless package of democratic, political, developmental and military assistance in Helmand. All of that is necessary to ensure that international terrorism never again has a base in Afghanistan.
	We are also working to make sure that our goals are Afghan goals, too. Assisting Afghan counter-narcotics initiatives is an obvious example. If we help them, we help ourselves at the same time. As I mentioned earlier, 90 per cent. of the heroin injected into the veins of young people in this country originates in Afghanistan. Helmand province is the largest single source of opium in Afghanistan. We can help to train Afghan counter-narcotics forces and support their operations, and we can provide intelligence. We can assist the Afghan Government in explaining their policies to the people. Above all, we can, along with the support of the Afghans, create the environment in which economic development and institutional reform—I again emphasise that both are essential to the elimination of the opium industry—can take place.
	So the range of tasks for the provincial reconstruction team is large. It will form part of a larger, more than 3,300-strong British force providing the security framework. That force will itself come under a new Multinational Brigade (South), which will initially be under Canadian, alternating with British, command. Our contribution, the Helmand taskforce, will include elements of the headquarters of 16th Air Assault Brigade, and an airborne infantry battlegroup. Based initially around the 3rd Battalion the Parachute Regiment, it will incorporate a force consisting of eight Apache attack helicopters, provided by the 9th Regiment Army Air Corps. That will be the first time that we have deployed this impressive new capability on an operation. The 9th Regiment will also supply four Lynx light utility helicopters, while 27 Squadron Royal Air Force will provide a detachment of six Chinook support helicopters.
	Other major units and capabilities include Scimitar and Spartan armoured vehicles from the Household Cavalry Regiment; a battery of 105 mm light guns from 7th Parachute Regiment Royal Horse Artillery; a battery of Desert Hawk unmanned aerial vehicles from 32 Regiment Royal Artillery; 13th Air Assault Regiment and 29 Regiment Royal Logistics Corps; 7th Battalion Royal Electrical and Mechanical Engineers; and 16 Close Support Medical Regiment. We shall also deploy four additional RAF C-130 Hercules transport aircraft. It is a substantial package—one that the chiefs of staff have agreed is necessary in order to maximise our chances and minimise our danger.
	We aim for these deployments to be fully operational by July this year. The total number of our troops in Afghanistan—those already there, those at the new ISAF headquarters, the Helmand taskforce and the temporary surge engineering capability—will fluctuate over the next few months. It will peak, briefly, at some 5,700, before reducing to fewer than 4,700 as— according to current plans—the engineers building the encampments return home from Helmand in July, and our Harrier GR7 detachment withdraws in June. Our forces will then comprise those needed to command ISAF, some 300 troops engaged in support and training tasks in Kabul, and the Helmand taskforce. Predominantly, they will consist of regular troops. There will, however, be a small number of reservists, most of whom will be drawn from the Royal Rifle Volunteers or from the 4th Battalion Parachute Regiment.
	I want to make a few things clear. The size and structure of the task force has been guided by a careful assessment of the likely tasks and threats that it will face. What matters is that we put the right forces in to do the job and to do it safely and well, and I make no apology if that requires more soldiers than some people initially envisaged.
	Attack helicopters are certainly formidable, but they are also necessary. The roads in Helmand are very poor, and that means that support helicopters are essential. They in turn need attack helicopters to protect them and the forces that they deploy. Let me stress once more: we are deploying this potent force to protect and deter. The ISAF mission is unchanged. It is focused on reconstruction.
	The resources for this deployment will be made available. This will be a three- year deployment, and it will cost around £1 billion over a five-year period. The resources will be made available, commencing in this financial year.
	As I said earlier, we have a clear strategic interest in the renewal of Afghanistan. Obviously, that informed our decision. Equally, we have similar interests elsewhere, and an interest in maintaining effective and capable armed forces. We took careful account of those factors as well, including our other commitments. This deployment is manageable alongside those other, wider commitments, including Iraq. It does not require drawdown in Iraq. As we have said continually, that will be based on conditions in Iraq itself.
	The House will be interested to hear about the command and control arrangements. To begin with, the multinational brigade as it arrives in Afghanistan in transitional format will come under the coalition. That is a necessary transitional measure, and is what happened when we established our first PRT in the northern city of Mazar-e Sharif in 2003. Of course, Canadian, Romanian and US forces are already serving in the south of the country. However, other allies, such as Denmark, Estonia and, I hope, the Netherlands need time to build up sufficient forces in southern Afghanistan to implement ISAF's expansion into the region, just as we do. I therefore anticipate that later this year, at the earliest opportunity after the transitional period, ISAF will take control of the forces in the south from the coalition. That will happen during our command of ISAF. The Kandahar headquarters of the Helmand taskforce will alternate between Canadian and British command, but will ultimately come under the command of the ISAF headquarters. In turn, the ISAF headquarters will be commanded by the British general in command of the allied rapid reaction force headquarters that is moving there.
	All of this has but one aim—a secure, stable, prosperous and democratic Afghanistan, free from terrorism and terrorist domination. The House will be concerned about the risks and dangers of the deployment. Whatever the difficulties and dangers— and I do not hide them from the House or the country—those risks are nothing compared to the dangers to our country and our people of allowing Afghanistan to fall back into the hands of the Taliban and international terrorism.
	We will not allow that, and the Afghan people will not allow that. They have already made great strides towards achieving a new future. They have a democratically elected President and Parliament, and democratically elected assemblies. Their legitimate economy is growing. Children—both boys and girls—are back at school, and refugees are returning home.
	I am the first to accept that there is a long, long way to go. Extending ISAF into stage 3 in the south is a small but hugely significant step on the journey. This country has pledged to help the Afghan people as they continue on that journey. I am convinced that that is something that we should do to help, and that it is something that we will do.

Liam Fox: I am grateful to the Secretary of State for his necessarily long and detailed statement, and for making a copy available to the Opposition in advance. He was right at the outset to remind the House why we are in Afghanistan. We are there as part of the NATO response to the 9/11 attacks on the United States and as part of a wider coalition seeking to prevent Afghanistan from collapsing into a security vacuum that could so easily be filled by al-Qaeda and other terrorist groups. It is right to state in the House that we have a duty to stand with our allies—nations large and small that have joined the war on terror.
	There are two unacceptable outcomes in Afghanistan—to fail to act or to act and fail. The slaughter in New York and London reminds us that our national security is best served by denying a breeding ground to those who are opposed to our way of life. So failure to act is not an option, but if we must act decisively, we must act effectively, since strategic failure would be a disaster. We need to know exactly what the mission is, what its objectives are and how success will be measured. Especially after Iraq, it is essential that the House asks detailed questions of the Government about the proposed deployment, and that the Government respond with clarity.
	Let me begin with risk assessment. Our troops will be deployed to Helmand province, focusing on anti-narcotic and reconstruction activities. The Government have already described the situation as less benign than the norm, and the situation can worsen rapidly. Insurgents are mobile and may move to where ISAF troops are located. What assessment have the Government made of the current security status in the south of Afghanistan and in Helmand province specifically? How do the Government believe that the threat to our troops would change in the event of the appearance of either new insurgents or insurgents displaced from Iraq or other areas? Do the Government have any evidence that al-Qaeda is transferring operatives from other areas, notably Iraq, to Afghanistan, and what assessment have the Government made of the degree of interaction between insurgents and Iran, given that the Iranian border is only 150 miles away from Lashkar Gar, where the British troops will be stationed?
	Let me ask about reconstruction. It would be wrong for the House to regard the reconstruction element as the easy road. Reconstruction will be a difficult task, as the tribal areas and the Afghan warlords do not share our view of how society should be constructed. Traditionally, successful Afghan Governments have been those with a light touch. What risk is there of our trying to apply a model of government suited to Kabul but unsuited to the southern provinces, and so creating resentment and hostility?
	Let me ask a number of questions about the deployment. There is widespread support in the House for the strategic objectives—anti-narcotic, anti-insurgency and anti-terrorist—set out by the Government, but the Secretary of State will be well aware of widespread anxieties that the level of resources committed by ISAF may not be sufficient to achieve the stated objectives, and that we may consequently be drawn into an escalated conflict. How confident is the Secretary of State that the total complement of ISAF troops in Afghanistan is or will be sufficient to achieve the Government's objectives? How sure is he that all the necessary equipment will be available? Both the National Audit Office and the Defence Committee have identified a shortage of helicopter lift capacity. Has that been addressed? If so, how, and with what effect on other operations?
	Then we come to the issues of command and control dealt with by the Secretary of State later in his statement. ISAF is a stabilisation force and as such is not geared for combat operations. Operation Enduring Freedom, however, is a counter-terrorism combat operation, and British troops will serve under both commands in Afghanistan and therefore operate under different rules of engagement. For example, under OEF, attacking insurgents can be shot at and pursued, but under ISAF rules of engagement, insurgents will not be pursued because that constitutes counter-terrorist activity. Even within ISAF, individual national contingents may operate their own specific rules of engagement different from ISAF's.
	The Secretary of State said that we are deploying this potent force to protect and deter, but can he confirm that that does not include a counter-terrorism role? Does not that send dangerously mixed signals? Can he tell us what arrangements have been made for increased NATO-ISAF command integration with the US-led OEF? Is he satisfied with the clarity of the chain of command under which British troops will operate?
	I said yesterday that we would want to know about the issue of prisoners. Can the Secretary of State tell us what powers of arrest and detention are available to British troops engaged in peacekeeping in Afghanistan, and how do they differ from those available to those acting under OEF command and those operating under ISAF command? What is the policy of NATO on the rendition of terror suspects detained by ISAF? What agreement, if any, has been reached between NATO and the Afghan Government relating to arrest and detention of suspects in Afghanistan? What assessment has he made of the effects of ISAF being integrated more closely in the longer term with OEF?
	There are many other questions for the Government to answer on the tension between the anti-narcotic and anti-terrorist objectives, or training, or the overstretch effects on the British armed forces generally. For clarification, can the Secretary of State tell us if the £1 billion cost that he mentions will be met from reserves? Can he tell us how much money will be specifically earmarked to compensate the farmers he mentioned for decreased poppy production?
	If the Secretary of State is unable to answer specific questions today, the House will expect clear answers before any deployment takes place. Every precaution must be taken to minimise the risk to our forces, whose courage and professionalism we salute today. The defence of our national security and the construction of a free and democratic Afghanistan are noble ideals. We cannot fail to act, but we cannot act and fail. It is in that respect that we will hold the Government to account, as is our duty.

John Reid: I thank the hon. Gentleman for his supportive posture, which is balanced by legitimate and critical questions. It is important that we examine those questions. I hope that I have examined most of them, but one of the benefits of a dialogue on the issue is if someone identifies questions that I should have asked, but have not. I do not regard that as a point scored, but a benefit, especially to the armed forces, because our questions should be searching. Therefore, if I have missed any of the hon. Gentleman's questions—I tried to scribble them down—I will write to him and, if he wishes, place the answers in the Library for other hon. Members to read.
	The hon. Gentleman asked about whether the resources available are from the reserve, and the answer to that is yes. He asked why there is a five-year plan when we are looking at three years, and the answer is because just as there is a build-up period, there is also a run-down period with preparations for people coming out. We have chosen an envelope that encompasses the envisaged three-year stay.
	The hon. Gentleman asked an important question about resources for indirect build-up of infrastructure, including alternative livelihoods. That will be a long task. In the first instance, we will consider compensatory transitional payments and alternative livelihoods in the medium to longer term. I am grateful to the Department for International Development and my right hon. Friend the Secretary of State who has spent so much time on this. A sum of the order of £20 million a year will be allocated to that specific area, some of it directly and much of it through Afghan Government projects. In addition, some $100 million is being spent a year and we have received assurances from the United States that that will continue for at least 18 months, so that is an additional amount. I am satisfied that the financial resources, which will complement our military intervention, are sufficient. However, how they are applied in terms of human beings working on the projects is, of course, dependent to some extent on the security situation, which is one of the reasons why we are there.
	The hon. Gentleman asked how we handle prisoners at present and how they will be handled. At present, we hand prisoners over to the Afghanistan Government and we envisage that that will continue. We have done a considerable amount of work to examine the threats to the security situation that face us, which is why the task force is so configured, but, of course, we update it. We have taken account of developments in places such as Iraq, such as the changing nature of the improvised explosive devices that have been used there, so that we can reallocate resources. There has been small—some would say significant—cost growth precisely to allow for contingencies and to compensate for new threats that come in.
	I confirm to the hon. Gentleman that the role is not counter-terrorist. However, I also confirm, as the House would want me to do, that if we are attacked while pursuing our reconstruction objectives and providing the framework for others so to do, including the Afghans, we will respond robustly. That is why we make a distinction between insurgency, or terrorist attacks on us, and a primarily counter-terrorist role. That role is a task for OEF.
	The hon. Gentleman asked about the possible synergy between the ISAF role in stage 3 in the south and stage 4, which will attempt to bring together American forces and our armed forces. There are several ways of achieving that. One is to have a chain of command that results in a double-hatted commander under whom there are two single chains of command: one on anti-terrorism, which would be mainly led by the Americans, and the reconstruction one in which we are involved. Another alternative would be that as we successfully exclude the terrorists, compared with some years ago, American forces could transfer over to reconstruction and join ISAF in helping to rebuild the nation of Afghanistan. There are thus several options open to us, but we will keep clear lines of command.
	The hon. Gentleman asked for clarity on numbers. I hope that we have given that clarity today. The total number of troops in Afghanistan through ISAF when stage 3 is completed will be about 18,500. The number of NATO troops in the south, including ours, will be 9,000. That is a hugely significant increase from the number of troops who are there are present.
	I hope that I have covered most of the main points that the hon. Gentleman made—I have done so at some length I know, Madam Deputy Speaker—but as I said, I will check the record and if I have missed others, which are equally important, I will write to him.

Peter Kilfoyle: The Secretary of State will be aware that our forces will face not only a resurgent Taliban, but a network of warlords throughout the whole of Afghanistan, many of whom are deeply involved in the pernicious heroin trade that exists in every province. He will also be aware that that trade has gone up by a factor of 20 in the past four years. That is why I am somewhat worried about the exact objectives when our troops are being deployed as a relatively small force—including the international component—in a country that has defied the US, the Russians and, historically, ourselves. How and when will he be able to measure whether the outcomes are successful? I do not expect anything specific, but on what criteria will he judge the success of our forces, who will be concentrated in one province of the huge country?

John Reid: I would make three points to my hon. Friend. He is quite right to point to the historical precedents, but as I said on Monday, there are two big differences between the Russian and previous British interventions, as well as those of other nations. First, we have been invited in by the Afghans themselves, including the country's democratically elected President and Government, which makes a big difference. Secondly, we are not there for imperialist reasons, unlike the situation during the several previous interventions, which the hon. Member for Louth and Horncastle (Sir Peter Tapsell) continually and correctly brings to our attention.
	We are addressing not only one area because there is an incremental approach. Stage 1 was in the north and stage 2 is in the west. Stage 3 means that three quarters of Afghanistan will be covered. I fully accept that not every metre of it will be covered, but the more we go round the clock on the stages, the smaller the chances that we will end up just squeezing a balloon so that the air—the corruption and narcotics in this case—goes to another area.
	I do not envisage that building a modern Afghanistan—which lacks a central corporate governance, in tradition and structure, unlike Iraq; which lacks a developed middle class, unlike Iraq; and which lacks the mineral resources of, say, Iraq—will be an easy or a short process. It will not be done during the three years in which we are there because there will be a continuing process for the Afghans themselves over many decades. I hope that we will be their friends and that we will support them over that period. I have no doubt that there will be other occasions when they will ask us for military assistance. We can make a significant difference in the south over three years by extending the writ of central Government, starting the development of alternative livelihoods and, at the end, having a force of the Afghan army and police in the order of 2,500 to 3,000 trained people, which would be similar to our numbers in Helmand. I think that my hon. Friend was asking whether there is an exit strategy for the deployment. Yes there is, and that is it.

Michael Moore: As I made clear yesterday, Liberal Democrats continue to back the international consensus of support on Afghanistan and agree with the aims set out by the Secretary of State in his comprehensive statement and the answers that he has given us thus far. Sadly, we cannot escape the fact that the country remains in a parlous state and that the new mission will be fraught with danger, especially in the south. We, like others, pay tribute to the bravery, professionalism and commitment of all the people who are to be deployed.
	The Secretary of State has made it clear that the deployment will go ahead only if it satisfies three key criteria. The British contribution represents a huge deployment. As he said, it is bigger than we had been led to expect. Given our ongoing commitments in Iraq and elsewhere, how will we avoid serious overstretch in the armed forces? With the contributions from other NATO partners still not resolved, has he put a limit on the British forces that will be made available, or are we committed to plugging any gaps? As for economic and other assistance, is he saying that ahead of the London conference, commitments are in place to ensure that the country's next five-year development programme will be delivered?

John Reid: On the last point, I am sure that there will be commitments in place and I hope that further commitments will be made at the conference of which the hon. Gentleman speaks. The international community has a vested and enlightened self-interest in seeing Afghanistan prosper to such an extent that it is no longer a failed state that terrorists can use as a base for attacking the west.
	The hon. Gentleman asked about plugging gaps over and beyond the troop numbers that I mentioned. No, we will not plug any gaps for others. I have spoken in the past 24 hours to Secretary Rumsfeld, the Secretary-General of NATO and my colleague the Dutch Defence Minister to tell them what we are planning and to say that we count on NATO. I am sure that NATO will provide all the means to fulfil the operational plans, including on numbers, but we will not fill the gaps for others.
	The hon. Gentleman mentioned the state of Afghanistan itself. I have been sombre in my statement to the House, not because I think that we should lack resolution or will, but because it is right not to approach these matters with a gung-ho attitude, or any bravado. Such pessimism when studying the situation should not diminish our resolution when we decide to go in. We need 100 per cent. support for our troops and 100 per cent. will to carry this through. That will be there from the Government, and I am sure that it will be there among the vast majority of hon. Members.

Several hon. Members: rose—

Madam Deputy Speaker: Order. I note that the Front-Bench spokesmen have taken about 40 minutes, and that many Back-Bench Members seek to be called. I ask that supplementary questions and the answers to them might be kept as short as possible because of the limited time that is available.

Chris Mullin: As regards counter-narcotics, I know that there are no simple solutions. However, has my right hon. Friend examined the feasibility study prepared by the Senlis Council, a reputable think tank, on the possibility of growing opium under licence for the international medical market, as happens in one or two other countries, as an alternative to the search and destroy method that is favoured by our American allies?

John Reid: Yes, we have considered that possibility, but our conclusion is that it would be hugely difficult—it would be too difficult to police legitimate and illegitimate commerce in that area. We consider all such proposals, but that one has been examined and thus far rejected.

Iain Duncan Smith: The Secretary of State will recall that I asked a specific question yesterday. I feel that in part he has answered it and that in part he has not. I have a real concern that there is now a divide—and an artificial one—between the activities that we are about to undertake in Afghanistan. In part, our strategic view is the restitution of civil authority and so on in the province, but I think that the terms of our rules of engagement should be set around what the threat is rather than our strategic aims and objectives.
	What concerns me distinctly is that the rules of engagement may lead us to be far too restrictive. On the ground, people will see our soldiers deployed as part of the programme of enduring freedom. If they are unable to act in line with that, they will be in deep danger. I say this as someone who has deployed and has often been concerned about the rules of engagement. I urge the Secretary of State to look again at this matter. Such confusion is deeply dangerous.

John Reid: It is because I know that that I listen to the right hon. Gentleman with such respect.
	We are convinced—that is my military advisers, the chiefs of staff and so on—that our rules of engagement are sufficiently robust. They are not the same rules of engagement as those of everyone else in Afghanistan. We do not have the same caveats as everyone else in Afghanistan. I can understand the right hon. Gentleman's concern. As I have said, we think that the rules of engagement are sufficiently robust. Given the right hon. Gentleman's experience and his previous position as leader of the Conservative party, I would be more than happy if he wanted to visit the Ministry of Defence and to discuss the matter in detail with some of my military advisers, if he wants to reassure himself on this point. I repeat that we think that the rules are adequate and robust. If they prove not to be, we will strengthen them.

Dai Havard: As my right hon. Friend will know, I visited Afghanistan last November with colleagues from the House. I had the privilege, under the armed forces parliamentary scheme, to visit 16th Air Assault Brigade and the various other elements of the battle group yesterday, and to see their planning and preparations for the deployment.
	I also saw the Estonian troops and even the Dutch military, who are quite happy to engage in this deployment should their politicians allow them to do so.
	I was told that the Air Assault Brigade were happy to test their new air manoeuvre capability. They felt that in this way they could dominate the ground sufficiently in order to carry out the task, but they wished that to be reviewed on a constant basis so that they would have adequate support in terms of helicopters in particular. In the event that the Dutch do not arrive, our personnel were also concerned to ensure that there was requisite combat air support in the form of fixed-wing aircraft and other assets.

John Reid: Yes, there will be. That is what we are insisting on. I am glad that my hon. Friend was at Operation Herrick yesterday. I will be there tomorrow. I am glad that he is able to convey to the House the morale and the resolution of our troops, which we would expect, and that of our allies.

Michael Ancram: I thank the Secretary of State for his announcement today because it will relieve the concerns of many members of our armed forces and those of their families. That is an important point at this time.
	Is it still the intention, as part of the ISAF deployment, that the Dutch troops will deploy to that part of Afghanistan between Kabul and Helmand, which I think is called the Oruzgan province, which is where many of the remnants of the Taliban reside? What would be the effect on our deployment, which the right hon. Gentleman has announced today, if the Dutch decided, either ministerially or through their Parliament, not to make that deployment, or if later, having made it, they decided to withdraw?

John Reid: The Oruzgan province is to the north. As I said, the Dutch Cabinet have unanimously decided that they wish to go ahead. The matter has to be discussed in their Parliament, although formal power does not actually lie there. However, there will be a discussion and a debate, in the way that we are having today. I believe that the Dutch will take a decision, but it is a sovereign decision for them. If they decide that they do not want to deploy there, we will have to find another way of doing that. I am confident that we will do so. We will not be plugging the gap, but the gap will be plugged.

David Winnick: Recognising, as my right hon. Friend has said, that the choice at this moment is between the continuing military role of the international community or the return of the Taliban fanatics, will the United States, in particular, be extremely careful over their intelligence, bearing in mind that some two weeks ago there was a bombing raid, and all the evidence seems to suggest that the victims, including young children, were innocent? Hearts and minds are involved in this campaign, and that includes the way that prisoners are interrogated by the Afghan authorities. I hope that all that will be very much borne in mind.

John Reid: I am sure that it is by the United States. It is always a dreadfully difficult task to balance the fight against a dreadful enemy who is unconstrained by any morality, any conventional norms of international standards and any Geneva convention. They will demean people, degrade them and show them publicly, and they are increasingly behaving in that manner. At the same time, we are fighting to a set of standards under scrutiny by the media, under international legalities, under human rights and other standards. It is always difficult to get the balance right. I would merely say that we and our allies, the United States and others, try to get the balance right continuously. I know that it is always on our mind, but we try to ensure that it does not unduly constrain our troops. In the long run, the maintenance of such standards strategically is a source of legitimacy and strength to us, and that is why we take such care.

Malcolm Rifkind: The invasion of Afghanistan, unlike the invasion of Iraq, was necessary and right, and the Government deserve our full support. Will the Secretary of State recognise that the distinction between NATO's reconstruction efforts and the counter-insurgency efforts that are led by the United States, which was always difficult to reconcile and always seemed artificial and implausible, is now infinitely more difficult to sustain if NATO troops are to be deployed to the south of Afghanistan? As the right hon. Gentleman has recognised, they may have to deal with insurgency attacks upon them. Will he therefore give slightly greater urgency than his initial remarks implied to working with our allies to try to ensure as quickly as possible some form of unified command?

John Reid: Obviously, I do not accept the premise of the right hon. and learned Gentleman's remarks, but I think that beyond that premise and his comments about Iraq he makes an important point. I do not think that it is impossible to distinguish between a mission that is led by a counter-terrorist objective and one that is led by rebuilding and re-capacity provincial reconstruction team-style objectives.
	Of course, it is impossible to distinguish absolutely between the two objectives, especially if terrorists are attacking and there are insurgency attacks. I reassure the House that if terrorists and insurgents attack us, we will defend ourselves. They would be attacked back. There is no question about that. That is not a matter of caveats. We are not going there to be the armed wing of Oxfam or anything of that nature. If we are attacked, the British forces will defend themselves. On the other hand, their primary task or main task is not to seek and destroy terrorists—the United States are leading that mission. I think that as they successfully exclude terrorists and the reconstruction task force, ISAF—NATO—moves round the clock of Afghanistan, there will be a closer synergy. How that is done is a matter for discussion. However, I will discuss the matter continuously, as I have been doing, with our allies. Some are more reluctant than others to see that achieved.

Roberta Blackman-Woods: I welcome my right hon. Friend's statement, especially ahead of the London conference on Afghanistan next week. Does he agree that in developing its peace-building strategy, the United Nations has emphasised the need for the task of maintaining security to go hand in hand with development and reconstruction? Will my right hon. Friend therefore assure the House that the troops that are sent to Afghanistan will not only maintain security, important though that is in the difficult terrain of south Afghanistan, but assist in reconstruction, and will he join me in reminding the House that it is important that we see though our commitment to Afghanistan and to the new democratically elected Government, as they seek to carry out the difficult task of building the country's infrastructure, services and employment base?

John Reid: Absolutely. As I said earlier, military means, though a necessary condition for success, are not a sufficient condition. We will provide the security framework within which the reconstruction of Afghanistan can take place. That is why, if we are countering narcotics and withdrawing some of the income, it is so important that there should be alternative livelihoods. People do not willingly starve to death in a state of grace. There must be something more at the end of it to allow them to maintain their families, so we must complement the intervention of the Afghan military with alternative means of livelihood.

Bob Russell: As the Secretary of State knows, 3,000 troops from 16th Air Assault Brigade are taking part in Exercise Herrick Eagle, although less than two weeks ago the Minister of State for the armed forces stated that
	"it does not mean that these units . . . will be committed to Southern Afghanistan in 2006."
	The announcement from the Secretary of State today confirms that that will happen. When will the deployment commence? How long will the 3rd Battalion the Parachute Regiment and elements of the headquarters of 16th Air Assault Brigade be based in Afghanistan? Does that not yet again illustrate the overstretch? When will the right hon. Gentleman address that principal problem?

John Reid: First, if the hon. Gentleman will allow me to say so, that was a classic case of a series of non sequiturs, each of which was intrinsically mistaken, and which, compounded together, were one big mistake. Because people start contingent preparations, it does not mean that it is inevitable that a decision will be taken to deploy them. The decision to deploy 16th Air Assault Brigade was not taken when we started the contingency preparations. It was taken this morning. Matters could have been otherwise, even as late as the past week or two. Secondly, there is no contradiction between our other commitments and those in Afghanistan. It is challenging, but there is not overstretch to the extent that the hon. Gentleman suggests. Thirdly, I dare say that the morale among the troops, with whom the hon. Gentleman continually tells me he mixes, is superbly higher every time I or anyone else meets them than his morale often is on these matters.

Bob Russell: Oh, for God's sake.

John Reid: I can only relate to the hon. Gentleman my experience of these matters.

Bob Russell: Disgraceful.

John Reid: The hon. Gentleman is entitled to his view. When I meet those soldiers on exercise, they are prepared to meet the challenge. It is to their eternal credit that their morale and resolution is superior to that of most commentators in the United Kingdom.

David Hamilton: As one who supported the involvement of British troops in Afghanistan and continues to do so, may I ask two quick questions? First, on our power to arrest suspected terrorists and hand them over to the authorities, does that also apply to suspected terrorists who are not of Afghan descent? What do we do after they are arrested? That is an important question that arises every so often. Secondly, the United States of America spends millions, if not billions, of pounds on reconstruction and development in the south and on discussions with the warlords. Will that money continue to be made available once the British troops go in?

John Reid: On the second matter, with reference to about $100 million, I am informed that the United States will continue to make that available, at least for the foreseeable future—18 months or so. On the first matter, which involves important but complicated questions about prisoners, at present we hand such prisoners over to the Afghan authorities, but there is an existing memorandum of understanding. We would take account of that in the light of the circumstances that we discover through our preliminary operations team that has been sent out to Afghanistan, and we will develop our plans and procedures accordingly with the Afghan Government. Perhaps I can write to my hon. Friend about that.

Mark Lancaster: To what extent have the harmony guidelines been sacrificed to fulfil the deployment?

John Reid: The harmony guidelines are, from memory, around 21.1. They should be around 24. I cannot give the hon. Gentleman the specific change because of the deployment, but if I may write to him, I will tell him exactly what effect it has had. At around 21.1, the harmony guidelines are not satisfactory. They should be around 24.

Jim Cousins: Can my right hon. Friend assure me that given a situation in which there are two different commands, one devoted to reconstruction and the other to security, there will be no security or counter-terrorist operations in northern Pakistan without the knowledge and approval of British forces and British commanders devoted to the task of reconstruction? Can my right hon. Friend also assure the House that if there is a deterioration in the security situation in Afghanistan or Iraq in the period leading up to July, he will reconsider these matters and come back to the House?

John Reid: I do not think I can give my hon. Friend the assurances that he seeks, if I understood his request correctly. Of course, where we are operating in close proximity, even though there are two different operations, there are enough overlapping relationships and intelligence to ensure that we work towards one common objective, but I cannot give my hon. Friend a specific assurance. However, I can assure him that we keep these matters under constant review, not least because of the potential requirement to try and achieve closer synergy between the two operations or a transfer of personnel between the two operations as we proceed.

James Gray: Would the Secretary of State mind if I asked a detailed question of key concern to my constituency? In his statement before Christmas on the loss of the Hercules, the largest single loss of life in Iraq, he stated that the only thing that he could find that was wrong was that the Hercules did not have foam retardant systems in the wings. Will he give the House an assurance this afternoon that the four Hercules aircraft to be deployed in Afghanistan will have full air defensive suites of all kinds supplied to them, as I am sure they will? Also, I know that he is in discussions with Marshalls of Cambridge about the fitting of foam retardant to the wings. Will those discussions have achieved some kind of outcome by the time of the deployment?

John Reid: Other than to say that we will have full defensive suites, it is not our policy to go into detail about the protective measures. I invite the hon. Gentleman to come and discuss that matter with me outside the Chamber.

Michael Clapham: My right hon. Friend's statement indicates clearly that the main task for the deployment will be the implementation of the Afghan Government's anti-narcotics strategy. I noted that he referred to a medium to long-term strategy. Does he agree that we are not considering crop spraying, and that the emphasis will be on bringing new economic opportunities to the farmers who previously grew poppies, which will be a long-term project? Does he believe he has the resources for that long-term commitment?

John Reid: First, the effort will be Afghan-led. That was implicit in my hon. Friend's remarks. Secondly, there will be a heavy emphasis on the proverbial carrot—on attracting farmers away from poppy production. Thirdly, I do not rule crop spraying in or out, although it is not on our agenda, but the stick is present too, in terms of risk, not for the farmers, but for the mafia bosses who run the trade. The intention is to render the trade riskier than it currently is, while offering an alternative to the farmers. No one in the House would be particularly concerned about greedy, corrupt, nasty mafia warlords who are making a great deal of money from pumping that poison into the veins of their own people and our people, but we all have 100 per cent. sympathy and empathy with the farmers, so we must get that balance right, as my hon. Friend suggests.

Angus Robertson: May I repeat the support of the Scottish National party and Plaid Cymru for what has always been an expressly sanctioned United Nations mission in Afghanistan? In reiterating our concerns about overstretch, may I highlight the problem of transport for service personnel, which, yesterday, the Secretary of State gave a commitment to consider? Will he tell us today what plans have been put in place to deal with the overstretch of transport flights identified by the Chief of the Air Staff?

John Reid: I mentioned in my statement the deployment of support helicopters and, indeed, of four Hercules aeroplanes in theatre. That deployment, along with the other assets that I mentioned, is assessed as appropriate and sufficient, subject always to the findings of the preliminary operations team, which we are sending out in order to gain further information and intelligence about the situation on the ground. As that develops—if there is any change in the configuration—I will speak to the hon. Gentleman. [Interruption.] The hon. Gentleman indicates from a sedentary position that he also referred to the transporting home of soldiers from theatre. It is always a concern to us, given the challenges that we face and the harmony guidelines of which we were speaking earlier, to ensure that when the roulement tour is finished, soldiers get home properly and quickly—subject, always, to conditions on the ground. The Chief of the Air Staff is trying to ensure that that is the case.
	I welcome the hon. Gentleman's support for the United Nations auspices under which we operate in Afghanistan. He will not need reminding of the fact that we are now operating under United Nations guidelines—the second resolution—in Iraq as well, and I take his comments as an indication of support there, too.

Chris Bryant: Like my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard), I visited 16th Air Assault Brigade yesterday, and all of us were impressed not only by the unique training simulator for Apache, but by the morale of Brigadier Butler and all his troops. The Secretary of State referred to the fact that this is the first deployment of Apache for British troops and it is being used very differently from the tradition over the past 10 years. Will he keep under review the way in which that air assault works, because there might be things that we can learn for deployment in other countries?

John Reid: Yes. We always have pretty critical studies post-op and sometimes during operations. We will certainly do that. I thank my hon. Friend and every other hon. Member who has given support for their kind comments about the troops on exercise yesterday.

Hugh Robertson: Fifteen years ago today I was deployed on active service as adjutant in my regiment; indeed, that regiment is one of those that the Secretary of State listed in this deployment. Then—as now—we deployed with the threat of a regimental reorganisation hanging over us, and I have to say to the Secretary of State that it was immensely destabilising. Will he give the House a guarantee that no serviceman or woman on that operation will be deployed with a similar threat hanging over them, and better still, will he agree to suspend the reorganisation until this period of operations is completed?

John Reid: The hon. Gentleman knows that that assurance cannot be given by anybody, because we are in the middle of the reorganisation. After six months, there will be roulement on many of these posts, so I cannot indefinitely extend such an assurance to the end of the period.
	All I would say about the reorganisation of the armed forces, particularly the Army, is that I fully understand the sentiment and morale elements associated with cap badges, regiments and so on, but I am fully convinced that the Chief of the General Staff and the chiefs of staff have embarked on a reorganisation under the supervision of the Minister for the armed forces in order to make our armed forces more capable than ever before. That means that they protect to a greater extent those who serve in the Army and increases their chance of victory. That, in sentiment and substance, is why we have done it. Despite the attachments to pre-existing organisational formats, which I fully understand, that is a move for the better.

David Drew: Like others here today, I had the opportunity to visit Afghanistan and 16th Air Assault Brigade as part of the armed forces parliamentary scheme and I concur with the remarks about readiness. Does my right hon. Friend accept that this is a very difficult mission and that we need an exit strategy in the short run as well as in the long run, particularly for troops who will be assigned to duty? It would be good to know that the House will be kept regularly informed of how the troops will be brought home, as well as about how other troops will replace them.
	I have raised with my right hon. Friend before the relationship with the Pakistani authorities. I was led to believe from last summer that the Pakistani authorities would mount their own campaign to deal with the insurgents on their own territories, but since then we have had the problems with the earthquake. Will he say something about that, because it is particularly apposite given such a porous border?

John Reid: My hon. Friend makes a good point. It is absolutely essential that our colleagues in this struggle—particularly nations which border Afghanistan—make the maximum possible effort to ensure that terrorists cannot use their country as a base from which to attack our forces or others in Afghanistan. Even in times of great difficulty President Musharraf of Pakistan has been making such strenuous efforts. The entire House was happy to see us contributing something towards dealing with the terrible events following the earthquake. We sent helicopters and commandos not only because of the humanitarian plight, although that was sufficient, but because of the knowledge that, despite all those problems on his plate, President Musharraf had maintained troop levels at the border in order to counter terrorists. That was an indication of his resolve, and I trust that that will continue on the part of everyone in Afghanistan.

Vincent Cable: Will the Secretary of State confirm whether the £1 billion to which he referred is an additional Treasury commitment or whether it comes from reprioritising MOD or Department for International Development spending?

John Reid: It comes from the reserve. When we have embarked on unexpected deployments—and over a period of years until 9/11, Afghanistan was unexpected—the Chancellor has been prepared, sometimes under very difficult circumstances, and in addition to the money spent on maintaining the defence posture, to support Her Majesty's armed forces in the tasks that this House asks them to carry out. If everyone supports the armed forces as the Chancellor has done in resources—and I am sure will continue to do—we will be better off. I am glad to respond in such emollient form. Perhaps I was unduly unemollient to the hon. Member for Colchester (Bob Russell); if I was, I apologise.

Keith Simpson: The Secretary of State quite rightly outlined the fact that this would be a coalition operation. I do not think that any Members are necessarily blaming the British Government, but many of us are concerned about his talking in his statement about the Danish Parliament examining the proposal, and about being optimistic that the Dutch, Australia and New Zealand may also provide forces. At such a late stage, the fact that those Governments are still looking at that proposal is very worrying. He made the point that British forces will not plug any gap. If, to speak pessimistically, any of those Governments fail to provide those forces, who will plug the gap?

John Reid: The commensurate and roughly equivalent force levels will be engendered through a NATO force generation process. We have spoken to the Supreme Allied Commander, and we are committed to doing this. I believe that all those nations will, at the end of the day, be part of this, but one waits on the others to make the deployment announcement. The Canadians have already done that, and they will be about 2,500 strong in Kandahar. The British have, in a sense, led on this and made our position known by saying, "We will not wait any longer, because of events on the ground. The Afghan people, the new governor in the area and our troops expect us to make a decision on this; let's make it." I hope that that will be a catalyst for these decisions.

Nigel Dodds: I thank the right hon. Gentleman for his very full statement. May I assure him, the Government and, more importantly, our troops and service personnel, of our full support as they seek to prevent the return of the terrorist-supporting regime in Kabul? On the issue of counter-narcotics initiatives, will the Secretary of State tell us how he is going to measure progress in that area over the next three to five years?

John Reid: We have a series of measures, which has been one of the benefits of having several months more than we envisaged in which to consider this matter. There are fairly detailed plans of how we might judge the progress, including a list of criteria by which such judgments may be made. An example is the acreage of poppy cultivation, but there are several others. These will make it possible, although not with perfect scientific accuracy, to make a judgment after several years, certainly about the trend and not only the relative but probably the absolute success.

Tony Baldry: The Secretary of State says that the reconstruction and provision of alternative livelihoods will be Afghan-led. Is he aware, however, that, on a number of occasions, President Karzai has prevailed on farmers in Afghanistan, including in Helmand, to destroy their crops, only for the promised compensation from the international community not to be paid in time for the farmers to plant an alternative crop the next year? If this plan is going to work, two things must happen. The international community must deliver on its promises, and we must build up the capacity of the Afghan Government and President Karzai to deliver. If that does not work, it would not be fair on colleagues in the Department for International Development to come back and say that DFID had failed. We must give that capacity to the Government of Afghanistan. That has not happened in the past; if this is going to work, it must happen now.

John Reid: I agree with every word the hon. Gentleman has said, and I know that these matters are high among the priorities of our excellent ambassador and embassy in Kabul.

Peter Tapsell: Notwithstanding the points that I made to the Secretary of State at Defence questions earlier in the week, I supported the original intervention in Afghanistan to clean out the al-Qaeda training camps in the Tora Bora mountains. I would remind the House, however, that Ministers assured us at the time that it was a temporary intervention and that we had no intention of occupying the country. The situation in Afghanistan, and in the middle east as a whole, is now very different. Now, al-Qaeda is able to train all over Iraq, which was formerly closed to it, as well as over large areas of the Islamic world. The Secretary of State says that we have been invited into Afghanistan by a democratic Government, but the sad truth is that President Karzai's writ runs only in the immediate environs of Kabul. Most of the country is governed by the so-called warlords that the Secretary of State has described. In Afghanistan, we face terrain that is vastly more difficult than that of Iraq or Vietnam, and a people who are far more war-like than the Iraqis or the Vietnamese. I have known Afghanistan well over a long span of years, and, in my judgment, we are asking the British Army to go into a country in pursuit of unobtainable objectives.

John Reid: The hon. Gentleman has made many points. Obviously, I do not accept his equivalence of the rag-tag international terrorists and former fascists in Iraq with the national liberation struggle of the Vietnamese people. I do not put the two in the same category. Furthermore, we do not intend to be in Afghanistan as an imperialist power. I would have thought that a man of such wide reading as the hon. Gentleman would see the differences, as well as the similarities, between the Afghan interventions. I do not think that he really believes that we have any long-term colonial ambitions in Afghanistan.
	I would not say that the writ of the democratically elected President ran no further than the borders of Kabul. For instance, he has just moved the Governor in Helmand and put in a new one, Engineer Daud, who is pursuing with some robustness the policies that we all want to see being pursued. That is one reason why we should not leave the governance there without the necessary military support. Those are among the reasons why I have made my statement today. It is true that the central governance of Afghanistan, which was a pre-feudal society, does not run to every area of the country. That is one of the points of our being there. We want to help the democratically elected Government to extend such governmental control.

Several hon. Members: rose—

Madam Deputy Speaker: Order.

Orders of the Day
	 — 
	Criminal Defence Service Bill [Lords] (Programme) (No. 2)

Motion made, and Question proposed, pursuant to Standing Order No. 83A(8) (Programme motions),
	That the Order of 13th December 2005 (Criminal Defence Service Bill [Lords] (Programme)) be varied as follows:
	1. Paragraphs 4 and 5 of the Order shall be omitted.
	2. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the motion for this Order.
	3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the motion for this Order.—[Bridget Prentice.]

Jonathan Djanogly: The short length of the Committee stage, and the expediency of dealing with this business by hon. Members on both sides of the Committee, might lead the Government, or their Whips, to assume that this programming might not be objectionable. I am concerned, however, not least because of the expediency of the Bill's earlier stages. Why do the Government now feel it necessary to place this straitjacket on our debate? To table this motion seems unnecessarily dismissive of the positive attitude that hon. Members have shown throughout the course of the Bill. It signifies a bullying attitude that was not present in Committee and that sets the wrong tone for our debate this afternoon.

Keith Vaz: I, too, am surprised by the need for the Government to table a programme motion on this Bill. Judging from the reports of the Committee stage, everything was extremely amicable, and the Minister herself said earlier this week during Constitutional Affairs questions that the Opposition had been pretty supportive of the Government's proposals. If we are to have a programme motion, presumably the Opposition will support it, because there are so few amendments to be discussed on Report that we could go on to have a Third Reading debate that would last longer than the Report stage and possibly even the Committee stage.

Eric Forth: I am really disappointed in my constituency neighbour, the Under-Secretary of State for Constitutional Affairs, the hon. Member for Lewisham, East (Bridget Prentice). I should have thought that she would know better than to treat the House in this contemptuous way. We have become used to Ministers assuming that these so-called programme motions—or guillotines, as we used to call them—will be quietly nodded through and that they need give no explanation to the House as to why they have been tabled. I shall have to have a word with theMinister about this afterwards, because our neighbourliness could come under severe strain.
	The motion reveals all about the philosophy behind programme motions. Let us look back at the original programme motion of 13 December, which is referred to in the motion that we are now considering. I will assume, in a generous spirit—which, of course, is typical of me—that the Government had envisaged that this debate would take place on a Thursday, so I shall cast my remarks in terms of Thursday business, although I could range more widely than that. I could, but probably will not—I say "probably"—pursue an analysis of how Monday's, Tuesday's and Wednesday's business might have been affected as well. For the sake of brevity, however, I will limit myself to Thursday's business.
	The original motion assumed that Report stage would end one hour before the moment of interruption, which implied that on a Thursday, Report stage would last until 5 pm and the Third Reading debate would last from then until 6 pm. Question Time would run from 10.30 am until 11.30 am, and let us assume for the sake of argument that business questions would run from then until 12.15 pm or thereabouts. According to my calculation, that would have allowed some four and three quarter hours for the Report stage.
	At the time when the programme is originally envisaged, we have no means of knowing what will transpire in Committee. The hon. Member for Leicester, East (Keith Vaz) has said that the Committee stage was amicable, and that the Opposition seemed to be giving the Government their full support, something that happens all too frequently nowadays. Let us assume that this is one of those ghastly non-controversial consensual measures to which we all sign up without too much debate—but the Government did not necessarily know that at the time. The problem with these programme motions is that when they are drawn up, the Government have no regard to what might happen in Committee or, indeed, on Report. So the Government allowed four and three quarter hours for the Report stage, still not knowing what might transpire.
	It might be said that that would have been bad enough. Who knows how many amendments might have been tabled on Report by Members who had not served on the Standing Committee, and for whom the Report stage provides an opportunity to contribute? The Government, however, swept all that aside. They said, "We, the Government, will generously allow you, the House of Commons, a whole four and three quarter hours in which to deliberate on Report." Several hundred Members, potentially—there are several hundred Members who are not in the Government—would have had four and three quarter hours in which to consider all the changes that they might wish to make on Report.
	That was then. This is now. Now, the Minister has the gall to present us with the motion that is before us, and to say, "Never mind all that. It has all changed now. We are going to make an even more draconian assumption: that the House will require even less time in which to discuss the Bill"—and, as I shall make clear in a moment, it is a substantial Bill.
	We began our debate on this programme motion at 1.36 pm. The Government are now saying that we have a total of three hours in which to consider all the remaining stages of the Bill. Potentially, one hour of that time will be taken up by this part of our deliberations—45 minutes for the debate on the programme motion plus a Division at the end. I now give warning that unless the Minister can persuade me more than she has so far that the motion has any merit at all, I shall seek to divide the House on it, because it is a disgrace.

Keith Vaz: It is always fascinating to hear the right hon. Gentleman speak about these issues because he is such an expert on them, but may I urge him not to prolong the debate too much? As he says, there are a good many important issues for us to discuss. In view of what he has said about her, the Minister may withdraw the programme motion and allow us a longer debate on Report. Only two amendments have been selected, and we might then be able to discuss them even more fully. If the right hon. Gentleman speaks for too long, however, we shall not have a chance to debate those substantive issues.

Eric Forth: Having seen the Minister's face during the hon. Gentleman's remarks, I can only say, "In your dreams". I can predict that the Minister will have no intention of withdrawing the motion.
	The hon. Gentleman—this is very uncharacteristic of him—seeks somehow to blame me for the fact that the House may not have sufficient time in which to consider this important motion. It is the Government's motion, however, that gives us but three hours in total to consider the Bill. If I, or indeed my hon. Friends, wish to examine the motion in rather more detail, that is surely our right. We are being given only 45 minutes in which to do it.
	Let me continue my analysis. If we assume that the first hour will be taken up by the debate on the programme motion and the Division which I hope will follow—it will, if it is anything to do with me—and the last hour is taken up by the Third Reading debate, we are left with but one hour in which to consider the two amendments, or more accurately the new clause and amendment.
	These are not trivial matters. The hon. Member for Leicester, East, who is an eminent legal expert, and the other eminent lawyers who are with me on the Conservative Benches, will doubtless want to bring their analyses to bear, but they will have hardly any opportunity in which to do so. The proposer of an amendment or new clause usually wants to explain it properly to the House. Others will undoubtedly wish to contribute, especially those with legal knowledge and expertise, and we shall wish to hear from them. I cannot imagine that that can happen satisfactorily in the time that we have been allowed.

Gwyneth Dunwoody: I am listening carefully to the right hon. Gentleman. I happen to agree with him about the programme, but will he tell me why Conservative Front Benchers do not oppose every programme motion on every Bill? That would at least draw attention to the issue.

Eric Forth: I wish they would, but my party's Front Benchers are in consensual mode at present. They seem to think that we will attract more support from the electorate if we oppose the Government as little as possible rather than as much as possible. This is the new mood of the Conservative party.

Madam Deputy Speaker: Order. Notwithstanding any new mood in the Conservative party, perhaps we could now address the motion, which is somewhat restrictive.

Eric Forth: I shall be delighted to do so, Madam Deputy Speaker. You always challenge me in this regard, do you not? You think that saying that the motion is restrictive will somehow constrain my remarks. I think you will find that it does not work quite like that, Madam Deputy Speaker.
	I was about to probe further in my analysis. In the one hour that I have identified between the programme motion and Division and the Third Reading debate, we have two matters of substance to consider: a new clause that is of some importance and an amendment, which is similarly important. Let us say, arbitrarily, that we allot half an hour to each. That means that the Government are seriously suggesting that in a mere half hour we as the House of Commons, with an obligation to our voters to scrutinise legislation, are expected at one and the same time to listen to the proposer of the new clause or the amendment, to hear Back-Bench contributions from the eminent lawyers here gathered on both sides of the House, and to hear the ministerial response. In one half hour—30 minutes—we as the House of Commons are expected to do justice to our responsibility to scrutinise legislation properly.

Mark Francois: I apologise for delaying my right hon. Friend's probing, and I intervene as one who is not a lawyer, eminent or otherwise.
	I suspect that the Government's response will be that part of their rationale was today's statement on Afghanistan. They felt that they must constrain the House's time in some way. Even if we allow what I believe may be the Government's justification, however, and given that both Front Benchers and Back Benchers have described the Bill as a relatively non-controversial measure, should this not have been one of those cases in which the business is allowed to find its own level?

Eric Forth: Of course I agree with my hon. Friend's last point, but how can he possibly have known that the Bill was non-controversial? The fact that my hon. Friend the Member for Huntingdon (Mr. Djanogly) has a cosy arrangement with the Government according to which it is allegedly non-controversial does not mean, as far as the rest of us are concerned—we may not have participated in Committee, but we may have come along with fresh ideas, or we may have been approached by constituents or interest groups—that a measure that may have looked bland and uncontroversial at first will remain the same throughout its passage. I object to the assumption that measures can be deemed uncontroversial by those who know better than my hon. Friend the Member for Rayleigh (Mr. Francois) and me, and that we must then row in behind that regardless.

Mark Francois: I thank my right hon. Friend for his courtesy. I would never accuse him of being non-controversial in any context: it would be more than my life is worth. I believe, however, that the hon. Member for Leicester, East (Keith Vaz), who I think served on the Standing Committee and knows the detail of the Bill, seemed also to suggest that it was not the most controversial legislation that had ever been presented to the House. That being the case, I offer again my argument that the Government might have been wiser in this instance to allow the business to find its own level in the traditional way.

Eric Forth: That may be my hon. Friend's view, but I see in the Chamber more than one Member from Leicestershire. Indeed, the hon. Member for North-West Leicestershire (David Taylor) is well known for his dedication to the parliamentary process and his power of analysis. He is looking very thoughtful, and he may well have thoughts on the Bill other than those of the hon. Member for Leicester, East, eminent lawyer though he is, who was not on the Committee and who may or may not have views yet to be revealed. My hon. Friend the Member for Rayleigh has shown us that, in every respect, the programme motion is a disgrace and an outrage to the parliamentary process. That is the long and short of it.
	Following on from what the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said, I hope that my hon. Friend the Member for Huntingdon takes the message back to our Front-Bench colleagues that we should not allow these programme motions to slip through uncontested, because again and again they illustrate a number of interrelated facts. The first is that the Government now assume that they, not the House, must control all aspects of the parliamentary process. They are saying to us, effectively, "When we introduce our legislation, we will decide how much time the House of Commons will have to consider it." That is what is so unacceptable.

David Taylor: The right hon. Gentleman's remarks in relation to me were probably over-generous. Will he not acknowledge that there have been in this consensual period a good number of Bills without a programme motion? After looking at Division lists from before and during that period, I know that he was present, so presumably—at least for a brief period—he was infected by this warm, fluffy desire to get on with things.

Eric Forth: Rarely am I accused of being warm and fluffy—I will treasure the moment—but the honest answer is that, from time to time, I find it difficult to persuade even one colleague to help me in dividing the House. If the hon. Gentleman is prepared to join me in changing Standing Orders so that one Member can divide the House, he will have a lot more fun. However, I accept his criticism, and perhaps I have not been as diligent as I should. I shall try to do better and see whether I can, following his advice, divide the House more often.
	There is an implication in what the hon. Member for Leicester, East said, which is that, somehow, the Bill might not be that important, and certainly is not that controversial, so it does not require so much time for consideration. Let us look at the gist of the Bill. The explanatory notes, which usefully provide a summary, say that it
	"changes the arrangements for the grant of public funding for representation in criminal proceedings in England and Wales."
	I can think of few things that could be more important in terms of our criminal law and representation of our citizenry within it.

Mark Pritchard: Does my right hon. Friend think that this is a programme motion to help the Minister on a difficult Thursday for the Government or is it part of a worrying trend of having contempt for the House?

Eric Forth: It is a very well established trend, if I may say so to my hon. Friend, and one that has developed over the last eight years or so. In the good old days, the Government would not have dreamed of doing anything like this. The tradition was observed that the Opposition by and large could control the pace of proceedings in the House and in Committee, rightly in my view, and only in the extreme would the Government introduce a guillotine or timetable motion to bring business to a proper close. That is the way it should have been. Now, the Government routinely and arbitrarily decide how much time will be allocated to business, leaving us simply to try to fit in as best we can.

James Brokenshire: My right hon. Friend makes an interesting point. Will he acknowledge that certain important clarifications were made during consideration of the Bill in another place in terms of the appeal rights in respect of decisions of the commission in determining whether access to justice had been properly granted? Guillotining a Bill in such a way obviously reduces the amount of discussion, and perhaps the progress that we might make on other issues of such import.

Eric Forth: Indeed, my hon. Friend is correct. He, of course, is one of the experts to whom I referred earlier, and I look forward to his contribution, although it will necessarily be brief because of the overly restrictive programme motion.
	New clause 1, which stands in the name of several of my hon. Friends—all of whom are here present, I am happy to note—says:
	"Notwithstanding powers conferred on the Legal Services Commission by section 1, the Court shall retain the power to grant a representation order upon oral application".
	Those are momentous matters, yet we now know, having arrived here on this day in these circumstances—the shape taken by today's business, such as business questions and the important statement, which rightly was allowed to run for some time a short while ago—that we have been left with this insultingly brief period in which to consider them.

Mark Pritchard: My right hon. Friend has mentioned a trend. In view of such programme motions being introduced in the House, does he think there is a link between that trend and controversial changes in public expenditure?

Eric Forth: Programme motions, as they have developed over recent years, have begun to have more and more adverse impact on our effectiveness as a legislature that is there properly to scrutinise—

Madam Deputy Speaker: Order. May I remind the right hon. Gentleman that we are discussing not programme motions in general, but this specific programme motion?

Eric Forth: Of course that is true, Madam Deputy Speaker, and I must not allow myself to be seduced by my enthusiastic hon. Friends into straying more widely than the motion itself allows. I shall try to resist that in future.
	I want briefly to discuss amendment No. 1, which stands in the name of the hon. Member for Somerton and Frome (Mr. Heath), who is, as ever, in his place. If one considers the explanatory notes as they relate to clause 2(2), one can see the potential importance of that proposal. I do not seek to judge its substance, but I want simply to put in context the time that might properly be required to consider it. The explanatory notes say that paragraph 3B
	"provides that power to grant a right to representation can only be exercised where an individual's financial resources are such that the body considering the application is satisfied that he is eligible."
	The amendment would make an important change to that.
	Again, with regard to the substance in these matters, I am looking forward enormously to the Minister's explanation of why she believes, having arrived where we are today in these circumstances, that we can do justice to the gravity and substance of the new clause and the amendment in the time left to us.

James Brokenshire: My right hon. Friend is making some interesting points about the proposals to be considered on Report, but clearly it is for the House to determine how it wants the debate to proceed. Under the original programme motion, more limited debate on the amendments would have allowed extended debate on Third Reading. In terms of the overall impression of the Bill and certain issues that may arise, such extended debate on Third Reading might be constructive.

Eric Forth: Indeed, but that takes us back to the attempt made earlier by the hon. Member for Leicester, East somehow to blame me for the fact that we might find ourselves rather constrained in terms of the time available on Third Reading.

Keith Vaz: rose—

Eric Forth: The hon. Gentleman is going to have another go. I give way again.

Keith Vaz: The right hon. Gentleman has only himself to blame. I understand from Members who sat on the Committee that four sittings were allocated for scrutiny of the Bill, but that consideration lasted only about half an hour. There was the opportunity to scrutinise the Bill at that stage, and we have further opportunities now, but he is letting the Government get away with not debating the substance of the Bill. Will he put his great eloquence on hold and call his Division?

Eric Forth: It is not my fault if the Committee did not do its job; I was not on the Committee. I did not frame this disgraceful motion; the Government did. I did not put on a statement earlier, knowing that this important business was to follow; the Government did. For the   hon. Gentleman to seek somehow to blame me for the fact that we find ourselves in this invidious parliamentary position will not do.

Mark Pritchard: Does my right hon. Friend agree that the hon. Member for Leicester, East (Keith Vaz) is a little confused? Earlier he suggested that he was surprised that the Government had tabled the motion. For him to point the finger over here is unfriendly at best. Perhaps he should have words with the Minister.

Eric Forth: I look forward to the hon. Gentleman seeking to catch your eye, Madam Deputy Speaker, to indicate whether he believes that the programme motion is remotely justifiable.
	I do not want to delay the House for too long because I want to leave time for the Minister—after my hon. Friends have spoken—to justify this outrageous, disgraceful and unacceptable programme motion, which I hope that the House will throw out.

David Heath: The right hon. Member for Bromley and Chislehurst (Mr. Forth) is right in two respects. First, the programme motion replaces a previous one, which was determined at Second Reading. It cannot be right to determine the length of Report at Second Reading when no one—not the Whips, the Minister or the Opposition—can know the interests that Back-Bench Members may have in the Bill.
	Secondly, I suspect that the right hon. Gentleman is right that had the programme motion not been moved today, proceedings on the Bill would have been completed well within the time allotted by the motion. We have now spent a substantial part of that time discussing a programme motion that I believe to be entirely otiose. Even at this point, the Minister may wish to withdraw it so that we can get on with the important substance of debate.

Mark Pritchard: Hon. Members will be pleased to hear that I will keep my comments short. There are long-standing principles with regard to guillotining debate in this House. As the Committee on the Bill was amicable, I am surprised that the Government have moved this unhelpful and unfortunate motion. There was cross-party consensus in Committee and on the Floor of the House today, with the hon. Member for Leicester, East (Keith Vaz) foremost among those indicating surprise that the motion was tabled.
	My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) rightly and eloquently pointed out that this is an important Bill containing important elements of public expenditure. Therefore, it is incumbent on all hon. Members to come along on behalf of their constituents, whose taxes will be taken as a result of changes in the Bill, and to be accountable. We need to hear the Minister respond at length to the debate and we need an opportunity to look at the details fully and frankly.
	Too many programme motions are being tabled and there is too much curbing of debate. We often hear that this House is no longer taken seriously and, regrettably, I often think that the Government are setting a bad example to new Members like myself. At a later point, I would like to compliment the Government for noting this debate, reading Hansard and changing their mind on tabling so many programme motions. This place is the better for rigorous debate and it is better served by robust debate. That is what this Chamber is for.

Madam Deputy Speaker: Order. Could the hon. Gentleman relate his remarks to this motion?

Mark Pritchard: I was about to do so in my concluding remarks, Madam Deputy Speaker. It is unfortunate that the Government have taken this course of action. I hope that they will have a rethink and allow all hon. Members who wish to speak to do so.

Bridget Prentice: My friend and neighbour the right hon. Member for Bromley and Chislehurst (Mr. Forth) is one of the great debaters and is always charming. He is someone with whom I like to think that I get on extremely well and I am always loth to disagree with him. However, I must do so today. I hope that that will not harm our deep and long friendship.
	I am aware that the right hon. Gentleman has a loathing of programme motions and he has a right to take that point of view. However, I must tell him that the debate in Committee was comprehensive, if not lengthy, and that the programme motion was agreed with both Opposition Front Benches.

James Duddridge: Will the Minister give way on that point?

Bridget Prentice: I will not. I understand why the right hon. Member for Bromley and Chislehurst takes the view that he does, but the consensual politics about which he spoke has clearly broken down somewhere along the line. The motion was agreed by the usual channels and for that reason I would like to proceed with the rest of the debate.

Question put:—
	The House divided: Ayes 262, Noes 65.

Question accordingly agreed to.

Criminal Defence Service Bill [Lords]

[Relevant documents: The Fifth Report from the Constitutional Affairs Committee, Session 2003–04, on the Draft Criminal Defence Service Bill, HC 746, and the Government's response thereto, Cm 6410.]
	As amended in the Standing Committee, considered.

New Clause 1
	 — 
	Power of Court to grant a representation order

'(1)   Notwithstanding powers conferred on the Legal Services Commission by section 1, the Court shall retain the power to grant a representation order upon oral application to the Court under circumstances in which it would not be practicable to refer the matter to the Commission.
	(2)   Paragraph 3B of Schedule 3 to the Access to Justice Act 1999 (c. 22) (financial eligibility) applies to the power in subsection (1) as if it were a power under that Schedule.'. —[Mr. Burrowes.]
	Brought up, and read the First time.

David Burrowes: I beg to move, That the clause be read a Second time.
	I am grateful for the opportunity to present the new clause, having heard the earlier debate on the programme motion in which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) put properly in context what are important measures in the Bill. The new clause is of great importance in terms both of principle and practice. It is its importance in terms of practice that I wish to concentrate on in the next few minutes.
	The context is important. The Government announced their intentions in respect of improving the criminal justice system and legal aid by titling their documentation, "Delivering a fairer deal: swifter and more effective criminal justice". I am sure all hon. Members would sign up to such a laudable aim. Indeed, the new clause seeks to achieve in practice a swifter, more effective criminal justice system. At this stage I must declare an interest as a criminal solicitor of 11 years, a criminal advocate and consultant at a local firm in Enfield.
	When one tries to put the legislation that is passed with great intentions by the House into practice in court, there is often a gap. It is that gap that I seek to plug today with the assistance of the House. I seek to avoid the vacuum that we can sometimes fall into when debating criminal legal aid and to look at the reality of the situation.
	The new clause properly reflects the need for means-testing and the financial requirements that are the essence of the Bill. It recognises the concerns of the Government in relation to consistency in granting representation orders. It also properly seeks to deal with concerns that have been raised by practitioners local to me and by a chief clerk of a local magistrates court about issues that have arisen as a result of the Bill: primarily, the fact that it would effectively prevent an oral application from being made to the court. An important principle has been put forward by the Government in the Bill: to confer powers on the Legal Services Commission that are presently before the court. While the Government would no doubt say that those powers are being devolved back to court staff and that, for all intents and purposes, in practice, the court staff who grant legal aid on administrative applications now will do the same after the Bill becomes law, there is still the prospect of that being removed from court staff. Even if it is devolved to court staff, as is proposed, within regulations, there is a fundamental gap in terms of preventing an oral application from being made to the court.
	It is important to look at the practical context. On the nature of the court process, a magistrates court hearing is not always as we would imagine. There is often a full court list as a result of perhaps operations that have taken place in the locality involving a number of members of the public being arrested for particular practices. It may involve a number of people who have been arrested and need interpretation skills. It may involve a number of people who are in the cells and who need other assistance. They may often be vulnerable. They may be mentally ill and need other assistance. They may require assistance and legal advice from an early stage.
	A magistrates court may have occasional court sittings on a Saturday or at holiday times. Those often involve just one magistrate and one court clerk dealing with what can be a very busy list. They have to deal with what we are discussing today, which is a fundamental change in relation to the process of criminal legal aid.
	We also have to be aware of the context in relation to the applicant. The applicant is not the straightforward applicant one can describe. The applicant could be illiterate, have learning difficulties, be unable to read or write. There are occasions when the applicant is mute and one has to deal with that situation. In all those circumstances, the option is available to the court to allow the matter to come before the court by way of an oral application, rather than through the administrative route of filling out a legal aid application. That option would not be available if we do not accept the new clause.
	I want to look at the example of someone who is mentally ill. It is the case that, increasingly, sadly, many people come before the courts who suffer from mental illness. The provision for them is often patchy and inappropriate. Often, a mentally ill person comes before the court without having any legal representation, despite the fact that under the Police and Criminal Evidence Act 1984 there is the right to have an appropriate adult to direct them to the need for legal advice. For one reason or another, they come before the court having been charged with an offence, they arebefore the magistrates and they need legal representation. The magistrates can see it clearly; indeed they can probably see on the basis of the charge that it is in the interests of justice that they receive legal aid.

David Taylor: Having sat on the bench for a good number of years, I recognise some of the circumstances to which the hon. Gentleman refers, but can the new clause be used in cases, for example, of fraud, where the person being charged is not in the category concerned? Although prosecuting fraud can never be justified in purely financial terms, there has been at least one significant case that involved fraudulent legal aid claims by a firm of solicitors, which cost the legal aid fund £10 million. That same fund, when that firm was prosecuted, incurred costs of £34 million in defence costs and £10 million in administration—£44 million in total. Would that be covered by the weakening that he describes in respect of new clause 1?

David Burrowes: The purpose of the new clause is perhaps not so much to deal with that circumstance. No doubt any first application in relation to someone who is charged with fraud would involve filling out the financial eligibility form, which would be complicated and require the administrative route that is followed in the Bill. The point of the new clause is to deal with those exceptional circumstances that I described: primarily, those applicants who have great difficulty following through with a written application, who have come before the court without any legal representation and whose need is great. That is particularly the case with those who are vulnerable or mentally ill, where there is a great urgency to deal with the matter as quickly, as expeditiously and as fairly as possible.

David Taylor: The new clause does not make clear the circumstances in which it would not be practicable to refer the matter to the commission. Would the intention be to include that in a schedule to the Bill if the new clause were accepted?

David Burrowes: A statutory framework of regulations will seek to go into detail in relation, for example, to people who originally fail the means test but who, it is recognised, suffer hardship and are unable to afford legal representation. That framework is, I understand, to be published after the Bill becomes law. It would no doubt also involve definitions in relation to practicability.
	The issue is that the Bill would without exception confer all the powers upon the Legal Services Commission that at present are devolved to court staff. The new clause seeks to give flexibility in the exceptional circumstances that I described. The term "when it is not practicable" can be judged properly; it is used in other legislation. The clerk can advise the magistrates on whether that is the situation. Plainly, if it is practical for the normal route to be followed—the administrative route of devolved powers to court staff—that can be followed. No doubt the advice can be taken from the clerk. However, there are the exceptional circumstances that I have sought to outline. As is the case presently, some of those who come before the bench will need a decision to be made on the basis of an oral application. The new clause seeks to be constructive. It would give effect to what is in place now and give the option. Perhaps it will be used rarely, although I hear from local magistrates that oral applications increasingly need to be made to deal with the position of the applicant.
	The need is perhaps greater now than before the Bill was mooted. Now there will be a financial requirement upon the applicant. If the client is mentally ill or mute, as one of my cases was, and comes before the court without legal representation, the magistrates will realise that there is a need for representation and to determine the issue of legal aid expeditiously. The applicant then needs a solicitor to go through the process of applying for legal aid.
	Without the new clause, the solicitor would need to consider the general criminal contract, whether the client was defined as a patient under that contract and whether an application could be made on behalf of the client. The solicitor would also have to have sufficient knowledge of the client's financial circumstances because now there will be a requirement to complete the financial side of the application. The burden is more onerous properly to complete an application for legal aid. Without the new clause, that will happen by the administrative route of going through the process of completing a form. Indeed, if it was refused, there could be an appeal process, which could be lengthy, delay the process and not be in the interests of either justice or the applicant.
	In that exceptional circumstance the new clause would allow the matter to be dealt with there and then within the court building and hearing. It would allow the application to be made to the magistrates who can plainly see that it is in the interests of justice for legal aid to be granted. They can determine also the issue of financial eligibility in court orally to allow the matter to move on expeditiously.

James Brokenshire: My hon. Friend makes some interesting points based on his experience in the criminal sector. Does he agree that if there is the delay that he is talking about, in terms of properly assessing whether legal aid should be given if we follow the current procedure rather than the oral hearing procedure which he is outlining in his new clause, that could be a burden in terms of not giving proper access to justice and seeing that justice is expeditious, and could increase the potential administration and costs if there are continuing delays in ensuring that a particular case or hearing is dealt with appropriately?

David Burrowes: I am grateful to my hon. Friend for that intervention. I agree that the new clause would seek to prevent the potential for increased delays and costs. The new clause seeks to meet the intentions of consultations on criminal legal aid. I seek to plug a gap which will be in the legislation without the new clause.
	Why not include the new clause as part of the armoury available to deal properly and expeditiously with legal aid, and allow the justice system to move on without delay? Is the issue primarily about wanting to speed up justice and to make it fairer, or is the Government's prevailing concern to confer all powers on the Legal Services Commission, not the courts, in order to gain control over the budget; rather than the prime motivation being, as it is in the new clause, to deliver effective criminal justice?
	I urge the House to support the new clause which not only plugs the gap in the one example that I have given, but also provides a safety net for the system so that we can properly achieve the goals that we all have.

Keith Vaz: I wish to speak only briefly on the new clause. It is sad that we have lost the eloquent skills of the right hon. Member for Bromley and Chislehurst (Mr. Forth) who argued so strongly earlier for more time to scrutinise the legislation. As soon as the motion was passed, he disappeared from the Chamber.
	I pay tribute to the hon. Member for Enfield, Southgate (Mr. Burrowes) for the way in which he moved the new clause. I have sympathy with it, but cannot support it because it does not deal with the fundamental problem of transferring the granting of legal aid from the courts to the Legal Services Commission.
	The Under-Secretary of State for Constitutional Affairs, my hon. Friend the Member for Lewisham, East (Bridget Prentice), is doing a splendid job at the Department. I have no problems with her being able to deal with, supervise and monitor the work of the Legal Services Commission, but she is creating a framework which will make it difficult in future for people to challenge decisions made by that commission.
	I was pleased when an amendment was passed in the other place to allow for the right of appeal on such cases. It gives people who apply for legal aid the opportunity to have that decision scrutinised by a body other than the Legal Services Commission. The most worrying aspect of some steps that the Government have taken on legal services and the court system is their wish to abolish rights of appeal and place decisions with the very organisations or individuals who are commissioned to make the original decisions. That is wrong.
	I thought that the new clause would give us the opportunity to restore that right of appeal, but it deals with applications in the first instance. It deals with those circumstances where for some reason an application cannot be referred to the Legal Services Commission. Therefore, it concedes the point that the first decision should be made by the Legal Services Commission. That worries me because there should be scrutiny and an opportunity for individuals to have their cases assessed by those other than the decision makers. In addition, it puts a great deal of trust and faith in the operation of the Legal Services Commission.
	It is clear from all the information that I have from individuals and practitioners who have had to deal with the Legal Services Commission that they are dealing with a highly bureaucratic organisation which seems to compound the delays that already exist in our legal system. Of course in reply the Minister could announce some radical shake-up of the way in which the commission operates to satisfy me and others that her faith in the organisation is justified, but neither that nor the new clause deals with the fundamental principle that others should review the decision.
	My hon. Friend the Member for North-West Leicestershire (David Taylor) made an important point. We need to know before the passage of the Bill the circumstances in which the new clause will operate. Where are those exceptions which would take us out of the procedures set down by the Government in the proposed statute and allow an oral application? The hon. Gentleman said that perhaps they could be included in draft regulations or by some other method by which Ministers can supplement legislation. That is a real problem. We need to know that information. Otherwise, people will have a choice and, given the choice, most would choose to make their application tothe courts rather than to the Legal Services Commission.
	The purpose of the Bill is not just to make the system more efficient, which hopefully it will; it is to save money because of the large increase in the legal aid budget over the last 20 years. I think that it now stands at £1.1 billion. The Bill seeks to save about £35 million. It would not be difficult to devise a scheme—we cannot do so now that we have reached Report stage—that will enable people who feel that they have not been treated fairly and have additional information to put before the bodies to go to another body to put their views forward. The new clause would not allow us to do that. It moves us in the right direction, but it is not quite the strengthening amendment that I wanted to see.

David Heath: I listened with great care to the hon. Member for Leicester, East (Keith Vaz) and I have a great deal of sympathy with his views. We debated in Committee amendments from another place proposed by my noble Friend Lord Goodhart. Here, I must take care not to pre-empt the debate on the next amendment, which forms its own separate group. I hope that we can reach a satisfactory conclusion on the question of the financial eligibility test. The Minister rejected the amendments from another place because she did not want to allow appeals on the strict matter of financial eligibility. However, on the wider, interest-of-justice test, the capacity does exist for someone to apply to the court, and thereby to short-circuit the legal services review system.
	The point made by the hon. Member for Enfield, Southgate (Mr. Burrowes) is a slightly different one. It concerns, in effect, having an appeal of last resort: a court's having the residual power to do that which is sensible and in the interests of justice within the confines of a court, rather than entering into a bureaucratic procedure. Indeed, the same point was made by the hon. Member for Leicester, East. The hon. Member for Enfield, Southgate is building on the amendment tabled by the hon. Member for Huntingdon (Mr. Djanogly) in Committee. We had a short debate on it in Committee and, as I recall, we divided on it and I gave my support to the hon. Gentleman. The Minister had a couple of problems with that amendment, but today's new clause addresses them. She was concerned about consistency, which subsection (2) of the new clause addresses. She was also worried about the provision's scope; however, subsection (1) of the new clause would introduce an element of conditionality.
	We are not talking about a great matter of principle, but simply about expediency. The question is, when matters have arisen during a hearing that make it clear to the court that the person in question should be granted representation, how do we deal with that situation without the need to enter into a bureaucratic process involving the Legal Services Commission? Such a process is not in the interests of the court hearing, the expedition of the case or of all the other people involved in the case, let alone the person receiving aid under thecourt's direction. Under such exceptional circumstances—clearly, they are indeed exceptional—restoring the residual power through the new clause would be of value to the court system. Such restoration should commend itself to the Minister as being entirely consistent with her approach to the legal aid system, and with achieving the result that we all want to achieve: a better, faster, more efficient and more effective court system.

James Brokenshire: I shall take just a brief moment of the House's time to speak in support of the new clause tabled by my hon. Friend the Member for Enfield, Southgate (Mr. Burrowes). In essence, this is a matter of justice and of ensuring that those members of our society who are vulnerable and less advantaged are not put at risk by the Bill's overall framework. My hon. Friend's comments about people with mental health problems and the obstacles that might ultimately prevent them from receiving legal aid that they are properly entitled to were particularly germane; indeed, that is a very important issue. I should at this stage declare an interest, in that I am a solicitor. However, I am not a criminal solicitor, so the Bill falls outside my area of practice; even so, it to some extent touches on issues of legality with which I am familiar.
	The comments of the hon. Member for Leicester, East (Keith Vaz) about bureaucracy and the Legal Services Commission were also relevant. The Bill attempts to streamline the system and to save the cost to the public purse. But we must also ensure effective access to justice, and if the new clause is not accepted, there could be further delays, leading to further costs. In essence, the question is: what is the sensible approach in such circumstances? We need a safety net that allows applications to the court in exceptional circumstances, as my hon. Friend the Member for Enfield, Southgate made clear. Indeed, his new clause uses the phrase,
	"under circumstances in which it would not be practicable to refer the matter to the Commission."
	So the new clause makes clear the circumstances in which it would provide a safety net and protection.
	The new clause might well need to be supplemented by some form of framework along the lines described by my hon. Friend, but there is much merit in it. It would aid access to justice for all in circumstances where bureaucracy, form-filling and over-regulation might otherwise prevent such access. It has my support and I commend it to the Minister. I look forward to hearing what she has to say about the key issues raised by my hon. Friend: ensuring effective access to justice in a timely manner, and ensuring that people who would otherwise be entitled to legal support from the state are not overlooked.

Jonathan Djanogly: My hon. Friend the Member for Enfield, Southgate (Mr. Burrowes) is a gentleman with no little experience of the practice of criminal law, and I, too, should at this stage declare my interest as a practising solicitor. This is a practical, administrative Bill, and it is important that the views of people such as my hon. Friend be aired and listened to—hopefully—by the Government. He has made an important contribution to this debate.
	The hon. Member for Somerton and Frome (Mr. Heath) suggested that we divided on a similar amendment in Committee, but I think that he will now acknowledge that we did not.

David Heath: indicated assent.

Jonathan Djanogly: We did not do so because I was not happy with the Government's position at that stage, and I wanted to ensure that we revisited this issue on Report. I am very pleased that my hon. Friend has dealt with it so comprehensively and well. Of course, I did indeed propose a similar amendment in Committee, and I still believe that the Bill should incorporate such an amendment in the interest of justice. It is important that, in exceptional circumstances where a defendant is incapable of making a written application, and where the situation is sufficiently urgent, there should be a residual platform enabling an oral application to be made in court. The Government rebutted that point of practicality in Committee, on the basis that granting courts such a power could lead to its being abused by applicants. As has been pointed out, such a power would apply in circumstances that courts would recognise as being exceptional, so such abuse would be obvious to any court. As has also been mentioned, the new clause deals with the problem by referring to issues such as practicability.
	The proposed procedure deals with real-life scenarios. It would expedite the court procedure, and it could prevent unnecessary delays in the facilitation of the access to justice that the Bill is trying to entrench.
	The support of practitioners in that regard should not be ignored. If my hon. Friend wishes to press the new clause to a Division, I assure him that he will have his colleagues' support.

Bridget Prentice: This Bill has two key objectives—to transfer the power to grant representation from the court to the Legal Services Commission, and to introduce a compulsory means test element that must be satisfied before any grant of legal aid can be made. The transfer of grant from the court to the LSC is designed to help achieve greater consistency in the grant of representation, as well as ensuring, as my hon. Friend the Member for Leicester, East (Keith Vaz) noted, that the LSC achieves greater control over criminal legal aid expenditure.
	By giving the courts—in other words the bench or the Crown Court judge—a residual power to grant representation, this new clause would threaten to undermine these objectives. It is for that reason that I shall ask the House to resist it, and I shall set out my reasons in some detail.
	The new clause would almost certainly generate the potential for more inconsistency, as each bench would be using its own discretion to reach decisions. Such inconsistency might therefore create an inherent unfairness in the system and undermine one of the key precepts of this Bill.
	Let me make it clear that the Bill will mean that the bench will have the power, ultimately, to determine whether the interests of justice have been satisfied. But it will not have the power to grant legal aid: that power will remain with the LSC, which will be able to make the grant only if the means test and the interests of justice test have both been satisfied. It is important for the House to understand that both limbs must be satisfied before legal aid is granted.
	We do not accept that there should be an exception to the two-limbed test. The interests of justice test determines whether it is desirable that a defendant be represented, and the means test determines who should pay for that representation—the state or the defendant. It is only when financial eligibility has been determined that the question of the interests of justice arises.

David Heath: Does the Minister agree that new clause 1(2) deals with precisely that point? It would require the financial eligibility test to be met for the interest of justice test to be agreed by the court.

Bridget Prentice: My point is that the new clause does not add to the Bill, which is perfectly capable of dealing with the problems that the hon. Member for Enfield, Southgate identified forcefully and correctly.
	New clause 1 proposes that there should be a procedure allowing the bench to grant representation, following an oral application. That procedure is said to be subject to paragraph 3B of schedule 3 to the Access to Justice Act 1999, which reintroduces the means test. That seems rather odd, when the court-based staff would be available to conduct that test.
	I am conscious of the argument put forward by the hon. Gentleman, who stressed that practitioners need to be able to apply in court for a grant of representation. He said that that need might arise when dealing with an urgent matter, and that that would work in favour of the court by helping to avoid unnecessary delays in the administrative process.
	I emphasise again that the Government are confident that the means test will be sufficiently straightforward for the court-based teams to be able to conduct it swiftly and accurately. Under our system, an electronic database in each court will allow instant access to means information.
	The hon. Gentleman was also concerned about first hearings involving defendants who are ill, illiterate or who have mental health problems. The hon. Member for Hornchurch (James Brokenshire) made the same point. However, the early-cover scheme will enable defendants to be represented at the first hearing without legal aid being granted. Solicitors will then be able to help their clients to complete the application form.

Jonathan Djanogly: The Minister referred to a new electronic system. Will she give us an idea of what that is, and when it will be introduced?

Bridget Prentice: I am no electronics whizz, so I cannot go into much detail. However, work on the programme is already in hand, and I can assure the House that it will be ready in time, if the Bill is passed and implemented. Moreover, plans have been made to train court staff to ensure that they are familiar and comfortable with the new system.
	The hon. Member for Hornchurch also said that a matter might arise suddenly before a court and that a person might need to be represented quickly. That might indeed happen, but a determination about who pays would still have to be made. If a late application became a route to free legal aid, I would be concerned that the practice might not remain exceptional for very long.
	Where there is a fundamental change on the issue of the interests of justice in relation to a defendant, we anticipate that it will be a relatively speedy process to obtain and process the necessary information on the means test. I do not agree with the hon. Member for Huntingdon that the matter would be dealt with more speedily by a bench or a Crown Court judge. In effect, a bench or a Crown Court judge will have to call an adjournment while determining whether a defendant should be legally represented, and for solicitors and counsel to be appointed and properly instructed. The system proposed in the Bill will take advantage of that inevitable and natural pause to seek the information pertinent to the means test. I see no reason why the need to refer back to the court-based grant teams should cause any significant additional delay in the process.
	The hon. Member for Enfield, Southgate also suggested that the new clause would further safeguard compliance with the European convention on human rights. I disagree: article 6(3) of the convention says that a person with insufficient means to pay for legal assistance should be given it free when the interests of justice so require. The Bill complies with that, and we will ensure that the regulations under the Bill do so too.
	The House should be aware that article 6(3) also gives the accused a right to defend himself in person.

Jonathan Djanogly: With respect to the Minister, I remind her that I did not mention human rights in my remarks—although I shall when I speak to amendment No. 1.

Bridget Prentice: The hon. Gentleman mentioned human rights in our debate on this matter in Committee. The fact that he did not mention them again today perhaps shows that my response then was more than adequate.
	As I was saying, article 6(3) of the ECHR also gives the accused the right to defend himself—even in circumstances where other people might think that he would be better off with legal representation.
	There are therefore three possibilities: the state pays for legal representation if the defendant cannot afford it; the person defends himself, or he pays for his legal representation. The first two alternatives are a person's rights: the Bill does not change that position, and the new clause would do nothing to safeguard it.
	The House will be aware that the bench will also be allowed to hear appeals against a decision to refuse to grant a defendant a representation order on the grounds that the interests of justice have not been satisfied. Although the bench may substitute its own decision on the interests of justice, as before, the responsibility for granting representation will continue to reside with the grant teams, as they must be satisfied that the defendant is also financially eligible.
	I emphasise that the Government are not seeking to deny the right to representation in circumstances in which the interests of justice test are met. However, let me repeat that by reintroducing a means test, the Government are legitimately seeking to determine whether the burden of defence costs should be met by the state or the individual.
	We believe that in designing the new system we have struck the right balance in defining the role to be played by the court in that process. Any proposal to arm the bench or a crown court judge with a residual power to grant representation runs counter to the consensus that has been built up in negotiations with our key stakeholders. I therefore call on hon. Members to reject the amendment.

David Burrowes: The Minister suggests that the new clause should be rejected because allowing oral applications will perpetuate inconsistency in the grant of legal aid. I suggest that that is away from reality. Almost all applications are by way of a written process already. It is only in exceptional cases such as when a mentally ill client is before the court—I will not repeat the examples—that one wants to have the option that remains in the new clause of allowing an oral application. It is hard to rationalise and find statistics to support the suggestion that oral applications that take place at present in exceptional circumstances create inconsistency in the grant of legal aid. The rationale for refusing, I suggest, is not valid.
	The Minister also suggested that ultimately the courts have the discretion to determine the interests of justice test. However, we cannot rest assured with that when the supplement to the framework document contains the threat that if the Legal Services Commission considers on monitoring that there is an inconsistency across the country, as the conclusion says on page 13, the Government
	"could choose to have the award of grant, including determination of the interests of justice test, administered solely and directly by the LSC, without the involvement of court staff."
	—without the involvement of the computer programme to which the Minister referred to allow proper processing of applications for legal aid. The heart of the concern among practitioners and other members of profession is that the essence of the Bill is a measure to remove all powers from those closest at hand to make the proper decisions. Particularly in exceptional cases, magistrates are in the best position in the court to hear an oral application. On that basis, I invite the House to vote.

Question put, That the clause be read a Second time:—
	The House divided: Ayes 145, Noes 234.

Question accordingly negatived.

Clause 2
	 — 
	Rights to representation: financial eligibility

David Heath: I beg to move amendment No. 1, in page 3, line 21, at end insert—
	'(5)   The provision which may be made under sub-paragraph (4)(c) includes provision prescribing circumstances in which the person or body reviewing a decision may refer a question to the High Court for its decision.
	(6)   Section 16 of the Supreme Court Act 1981 (c. 54) (appeals from the High Court) shall not apply to decisions of the High Court on a reference under regulations under this paragraph.'.
	Two improvements were made to the Bill in the other place. One was to extend the appeal in the interests of justice and the second was to introduce the capacity for an appeal on the grounds of financial eligibility. It is the latter to which we now turn. I still prefer the proposals made by Lord Goodhart in the other place and I regret that the Government were not able to accept them. However, in Committee I told the Minister that I was prepared to consider ways in which we could accomplish at least part of our objective by another route that was more acceptable to her and the Department. She was kind enough to suggest that we could have further discussions on that matter, and I pay tribute to her advisers who met with me to consider possible alternatives.
	The amendment is a compromise based on those discussions, and that is how Parliament should work. A Minister has a position and Opposition Members have a contrary position, and if it is possible to reach an accommodation—sometimes it is not possible—we should seek to do so, especially if it improves the legislation.
	The objections that the Minister raised in Committee were threefold. First, she was concerned that we should not have appeals based simply on the arithmetic of the Legal Services Commission. If financial eligibility is simply a question of adding up the sums and coming to a conclusion, it would be wrong for judicial arbitration to be used to decide whether the sums were done properly. That was, as the Minister put it, an administrative matter and an administrative review was the right way forward.
	The second concern was that a right of appeal against the financial eligibility conclusions of the commission might lead to vexatious appeals and, therefore, not only a slowing down of the system, but additional costs, without any gain for the outcome as far as the appellant was concerned. There was an additional and more subtle point that if an appeal against a decision of the Legal Services Commission was made to a magistrates court, the court would hear it on the basis of the advice of the clerk to the justices who had made the original decision. That seemed to be a rather circular process that would not get us much further.
	It is my strong view that there are occasions when the determination of a person's financial eligibility can be open to doubt when it is judged against the specific criteria laid down by the Legal Services Commission. The system involves a bureaucratic exercise and when dealing with any set of regulations, as we know, there will be exceptions when people do not fit neatly into arrangements. For example, a person might have a nominal income that could not be used because there was a challenge in law regarding the person's right to that income, or because it was being paid into a bank account in a country to which the person had no access, so the funds could not possibly be used to support the representation. It was my concern all the way through to ensure that in such exceptional circumstances, there could not be simply an iteration of the bureaucratic system of the Legal Services Commission to produce a negative outcome when the interests of the person applying for legal aid would clearly be served by a successful outcome, although that could not be achieved by administrative review.
	The Minister said from the start that everything is open to judicial review, which is of course right. It could be argued that judicial review might satisfy the article 6 test, although I am not entirely convinced. However, the problem is that judicial review is expensive and slow. A person in such a position would be in a catch-22 situation of not having the funds to mount a defence case, but needing to find funds to undertake judicial review to unlock funds for that defence case. That would be impossible, so it would be an unsatisfactory position.
	The amendment satisfies my basic requirements and I hope that it satisfies those of the Minister, too. We are suggesting that when a question of financial eligibility that falls outside the strict criteria arises—when a doubt arises in law, or because of other circumstances, about whether the financial criteria should apply—there should be a duty on the Legal Services Commission to refer the matter to the High Court for adjudication. Under such circumstances, the High Court could determine the funds that should be properly considered under the criteria of the Legal Services Commission and make an award of representation.
	The importance of the process is purely that it is a means for appeal, albeit one that is filtered by the Legal Services Commission. There would be a route for circumventing bureaucracy in the exceptional circumstances that I have predicted. The advantage for applicants would be that they would still have the capacity to obtain judicial review on the decision of the Legal Services Commission. If the commission unreasonably decided not to refer a case to the High Court, that decision could be subject to judicial review.
	Amendment No. 1 addresses the exceptional circumstances that were in the mind of my noble Friend Lord Goodhart, although the situation is not as satisfactory as it would have been if his amendment had been acceptable to the Government. I again pay tribute to the Minister and her officials for listening carefully to the points that I have made to allow us to come up with an amendment that should represent an agreed solution. I commend the amendment to the House and hope that it will satisfy those in another place who take an interest in such matters.

Keith Vaz: I will speak only briefly to welcome the amendment. I think that it is the sensible way forward. I, too, would have preferred a provision to allow the right of appeal. I understand that there will be exceptional circumstances. I very much hope that the Government will accept this sensible amendment.

Jonathan Djanogly: It is at this stage that we see the real implications of the programme motion. I want the Minister to have time to reply, so I shall be brief.
	As for the amendment, I have a certain feeling of déjà vu. It has been the determination of the Government to eliminate the appeal process, which was astutely introduced by my noble friends and Liberal peers in the other place. Once again, I feel obliged, as was the case with the hon. Member for Somerton and Frome (Mr. Heath), to reiterate our belief in the importance of an appeal process forming part of the Bill, and in turn upholding the principle of access to justice. However, in the light of the amendment, it seems that we have a compromise. I welcome that to the extent that a right of appeal is not completely removed from the Bill, as would have been the case otherwise. For that, I am grateful.
	I must reiterate the importance of an appeal process rather than simply having a judicial review process that the Government seemed to want to stick by. Our noble friends and Opposition peers in the other place felt it appropriate to allow for an appeal process in relation to the eligibility test reintroduced by the Government. We welcomed that because we believed that it was important that the courts should be able to hear appeals on the interest of justice test as well as on the eligibility test, and that the courts should be able to consider these matters afresh.
	We therefore found the Government's decision to overturn the amendment moved in the other place to be irrational and potentially damaging to the Bill, but in essence we give our support. I note that Members from all parties, including the hon. Member for Leicester, East (Keith Vaz), have come to roughly the same position.
	Their noble Lords ultimately understood the complicated nature of an eligibility test that cannot be accurate on every occasion. The Government stated in their supplement to the framework document that there will be regulations for the consideration of cases in which exceptional circumstances require funding for those who do not meet the eligibility criteria, but not by appeal.Page 12 of the supplement states that the test is whether the cases require a fine judgment that warrants the intervention of the courts. Surely exceptional cases meet that test.
	The Government seem to resist the Lords contribution on the foundation that it is a waste of court time to have to deal with administrative matters. That they are administrative is quite clear. However, the Government should consider the circumstances recognised by their lordships in the other place whereby a defendant's financial, legal and social means fall not within the realms of administration but within the remit of the administration of justice.
	The Government have conceded that there are exceptional circumstances where the eligibility test does not simply apply to factual issues, but say that these can be dealt with simply by judicial review. To our mind, that is misguided. The process of judicial review is too cumbersome suitably to address the rights of those whose plight has been worsened by non-financial issues under the merits test. Judicial review demands a new and separate process that can only prove more costly than referring back to a judge or court that has already dealt with the matter.
	Hon. Members may now appreciate that the potential compromise that the amendment presents is not one that we would see as the perfect answer to an issue on which we have argued strongly throughout the passage of the Bill. At the same time, we can accept an amendment that provides a platform for referring the question to a court. With the amendment, we accept that nothing will be lost by the defendant and that in the correct circumstances the correct decision will be reached.

Bridget Prentice: I am grateful to the hon. Member for Somerton and Frome (Mr. Heath) and to those Members who served in Committee, who realise how important it is that I manage to get the hon. Gentleman's constituency correctly pronounced for once. I am grateful to the hon. Gentleman for what he has expressed about officials. I will ensure that they are all aware of his gratitude and positive remarks.
	It has always been our firm view that an administrative review was the most appropriate mechanism in the situations under discussion. However, we are sensitive to the concerns raised by the hon. Member for Somerton and Frome and others in Committee and on Report. I accept that there may be a very limited number of cases which are not just about number-crunching, but which may raise points of interpretation of the regulations. That is likely to happen at the beginning of the scheme particularly, and we can then set a precedent for what the scheme is intended to achieve.
	Having listened carefully to the arguments presented by the hon. Gentleman and others, we are willing to consider his amendment. The proposal has advantages over both consideration by a magistrates court and reliance solely on judicial review. The amendment does not undermine the broad principle that a challenge to the means test where the applicant alleges an administrative error or miscalculation would be most appropriately provided through the administrative review mechanism. However, I acknowledge that in the rare cases where it is anticipated that a difficult issue such as a point of law may arise, the amendment represents a practical and measured response to the concerns expressed.
	The amendment marks a coincidence of desire, so to speak. It offers the sensible balance that we have been aiming for, and I am pleased to urge the House to accept it.

David Heath: I hugely welcome the Minister's remarks. An outbreak of consensus seems to have spread to all Benches. That is a remarkable occurrence at the end of Report, and in this case it has the merits of improving the Bill and makes the Legal Services Commission work better at administering legal aid than it would otherwise have done. I am grateful to the Minister, her officials and hon. Members in all parts of the Chamber who have supported my amendment.
	Amendment agreed to.
	Order for Third Reading read.

Bridget Prentice: I beg to move, That the Bill be now read the Third time.
	The Bill marks a significant stride forward in ensuring that the criminal legal aid system becomes fairer and more effective. It will achieve this by re-introducing an updated and revised means test, as well as transferring responsibility for the grant of criminal legal aid representation from the courts to the Legal Services Commission. The Bill reflects our firm view that those who can afford to pay for their criminal defence costs, not least wealthy Premiership footballers or lottery winners, should be asked to do so.
	By targeting resources on those who most need them, we will be able to deliver a sustainable legal aid system that continues to serve the needs of this and future generations. In short, the Bill will help provide for a criminal legal aid scheme that ensures access to justice for all, while giving better value for money to the taxpayer. I am sure all hon. Members will be pleased that their constituents can welcome the Bill knowing that those who earn vast sums of money or gain vast sums by other means will no longer be eligible for legal aid.
	I have been encouraged that the key principles that underpin the Bill have broadly met with unanimity from both Houses. I am delighted that on the one issue where debate has been most intense—the policy on reviews in respect of the new means test—we have been able to reach a consensus and a practical solution. I hope that the House of Lords will take the same view. The fact that we have been able to work closely with the hon. Member for Somerton and Frome (Mr. Heath) demonstrates the constructive spirit in which the House has debated the important issues raised by the Bill. I pay tribute to him and others, including the hon. Member for Huntingdon (Mr. Djanogly), for their contributions today, in Committee and on Second Reading, which have got the Bill to this stage.
	I also take the opportunity to thank all hon. Members who served on the Committee and my hon. Friends in the Whips Office, particularly my hon. Friend the Member for Cardiff, West (Kevin Brennan), for ensuring that we have had an informative, albeit concise, debate.
	May I express through you, Mr. Deputy Speaker, my apologies to my hon. Friend the Member for Hyndburn (Mr. Pope), who was one of the Chairmen of the Committee, but who, unfortunately, owing to the precise and concise way in which we dealt with matters, was unable to chair part of our proceedings. I thank, too, everyone on both sides of the House who has participated today and throughout our proceedings for ensuring that we pass a Bill that will stand us in good stead for the future.
	Finally, I thank the officials in my Department for the excellent work that they have done, not just on my behalf but on behalf of everyone in the House in ensuring that we have a Criminal Defence Service Bill which will last long into the future. I commend the Bill to the House.

Jonathan Djanogly: I join the Minister in thanking all those Members on both sides of the House who have been involved with the Bill. I thank the Minister and her officials generally for being constructive and prepared to consult, and I thank the hon. Member for Somerton and Frome (Mr. Heath) for his important contribution to the Bill's progress. I pay tribute to my hon. Friends the Members for Rugby and Kenilworth (Jeremy Wright) and for Enfield, Southgate (Mr. Burrowes), who provided me with valuable assistance in Committee and today, and to my hon. Friend the Member for Upminster (Angela Watkinson), who has worked hard on the Bill. I also pay tribute to those in the other place who so ably assisted in allowing this worthwhile Bill to come this far.
	The Bill has been a work in progress, and a significant part of that was achieved by their lordships. We remain supportive of the principle that those who can afford to pay for their defence should do so as a necessary prerequisite to a fair, effective justice system that gives taxpayers value for their money.
	The Bill was subject to a number of amendments in Committee and on Report, some of which were non-contentious Government amendments, but many others were tabled in an attempt to forge an effective piece of legislation, which is essential in stabilising the current failing legal aid system. Much good work has been achieved. For example, significant progress has been made on producing a thorough and comprehensive set of regulations that set out the detailed calculations necessary to assess whether individuals will be entitled to relief.
	Issues raised in debates in both Houses that have been addressed in the supplement and by amendments to the Bill include: that the interests of justice test should be a judicial rather than an administrative decision; that it should be possible for an applicant to be granted legal aid when the interests of justice clearly require it, even if the applicant has failed the means test; that some contribution should be made, by those who qualify for representation and are capable of making it, to costs in the magistrates court; and that responsibility for legal aid matters be restored to the Lord Chancellor's Office. We have supported or proposed those changes.
	Throughout the passage of the Bill, one issue, appeals, has persisted despite what has been achieved. Under the scheme originally envisaged, the court could consider an appeal as if it were merely hearing a judicial review rather than making the decision itself. Following strong arguments against that on Second Reading and in Committee in the House of Lords, the Government updated the supplementary framework document published in October 2005, which sets out the details of the regulations that the Secretary of State proposes to make under the Bill. That now makes it clear that the court will be able to hear appeals in the interests of justice, with its own decision replacing that of the Legal Services Commission. That would, however, have applied only to appeals on the misapplication of the interests of justice test. Therefore, under the leadership of our noble Friend Lord Kingsland and Liberal peer Lord Goodhart, an amendment to extend appeals to the eligibility test as well as the interests of justice test was passed on Report.
	The amendment tabled by Lord Goodhart and Lord Kingsland appeared to remove the thorn in the side of the Bill, for which we were grateful at the time. However, it was a shame that, in Committee in this House, amendment No. 1 overturned that amendment. We strongly opposed that, and the eligibility test became the remaining issue. It is unsatisfactory that those who are unable to afford to go to court because they have been denied legal aid can seek redress only through an expensive and cumbersome review. In Committee, I tabled an amendment to give the courts a residual power to grant a representation order upon oral application to the court. We thought that that would prevent unnecessary delay in court proceedings in exceptional circumstances. That move would have been all the more important in the context of the Government's amendment that I have just described. We have revisited these issues today. As my hon. Friends have argued in Committee, it is cheaper, faster and better to put such matters into an appeal before the court, rather than through judicial review.
	In other respects, the Bill is a good measure, and I hope that the Minister will not allow failure to act on the outstanding issues to overshadow the wider achievements. The Conservative Opposition feel that access to justice is a serious matter that requires full and detailed consideration. Through the determined efforts of our noble Friends in another place, such detailed consideration has been possible. The Conservative party has long been in favour of many of the measures in the Bill, including means-testing for those who can afford it. The Government abolished that means test in 2001. Now, somewhat bizarrely, five years later they are bringing it back.

James Duddridge: What assessment has my hon. Friend made of the additional cost involved in that change? My impression is that the Government simply got it wrong and that, while I welcome the Bill, it seems to be backtracking. What assessment has my hon. Friend made of the amount of money that has been wasted?

Jonathan Djanogly: My hon. Friend asks a good question. Perhaps the Minister will be able to tell the House the answer.
	We support the Bill in principle, but there are various questions that the Government need to address. While we largely welcome the Bill, especially the introduction of means-testing, it represents only a very small step towards the reform of the legal aid system. Yes, the growth in spending on the criminal defence service has to be checked, but we also need a focused and sustainable plan of action to address these serious issues.
	The Department for Constitutional Affairs press briefing on the Bill stated—rather grandly, I thought—that the Bill would
	"ensure that the cost of criminal legal aid does not continue to threaten to erode the civil legal aid scheme, which is recognised as a vital first line of defence against social exclusion".
	I am afraid that, on its own, the Bill does no such thing. Much as we agree with the basic premise of the Bill, it does nothing to tackle the other main factors driving the increase in criminal legal aid costs, in particular the very high cost criminal cases and the way in which the Crown Prosecution Service manages prosecutions, especially complex ones. It certainly has nothing to do with helping civil legal aid, as the Department's press release suggests.
	As the Department for Constitutional Affairs itself acknowledged in its recent White Paper, more than 50 per cent. of Crown Court legal aid is now consumed by just 1 per cent. of the cases involved. My noble Friend Lord Kingsland said in another place in relation to means-testing:
	"I hazard that however much money it will save, it will save nothing like the amount of money that high cost cases cost the criminal legal aid system."—[Official Report, House of Lords 13 June 2005; Vol. 672, c. 1083.]
	The Government will no doubt argue that all these matters are being examined by Lord Carter's review of legal aid—in fact, the Minister has done so already—and that we should await the outcome of that review. If so, we should like to know when that review is to be published. Why is it not available now, when it is so clearly needed in the context of this debate?
	It is self-evident that we need a far greater emphasis on reducing expenditure in high cost cases, and that we need to pursue initiatives aimed at achieving better value for money across the criminal justice system, such as more effective trial management. Irrespective of Carter's review, the Government should be seeking urgently to make progress. What we need are imaginative solutions if we are to achieve a sustainable legal aid system and an application of basic management skills to criminal case management.
	We attempted to deal with the issue of a Crown court scheme on Second Reading and in Committee. The Government had made a fairly convincing response to our earlier request for the contemporaneous introduction of the Crown court scheme, and we are prepared to accept the concept of a phased roll-out of a similar regime in the Crown court on the basis that it is expeditious. We should, however, like to know from the Government when that is likely to happen. We should also like a review of the Bill's effects before the means-testing scheme is implemented in the Crown court. Will the Minister please confirm that that will happen, and explain how it is likely to happen? We recognise the benefits of a so-called phased roll-out, but that can only be effective if there is a full and expeditious appraisal of the consequences of the changes proposed in the Bill.
	As we discussed these points during the Bill's earlier stages, I shall not discuss them now in great detail. However, if we are to have split magistrates and Crown court systems and starting dates, we—along with our noble Friends in the other place—have concerns about the perverse incentive that may result if the Crown court scheme is implemented at a later date. Defendants may opt for the Crown court route in cases that are triable in either way in order to ensure a more favourable position in regard to legal aid. That is another reason why the Government should be expeditious in applying the scheme to the Crown court.
	The aim of the Bill was to address the funding crisis that beset the Government who abolished means-testing. Now they have recognised the error of their ways, it is important also to recognise the drain of high cost cases—particularly in the Crown court—that could hinder the merits, in practice, of what we ultimately support in the Bill.
	The problem is not that the Government are spending too little; the problem is that cases need to be managed more efficiently, and there needs to be clarity about what legal aid is spent on. The Crown Prosecution Service, and judges themselves, need to manage cases more efficiently. Dealing with the management issues at an early stage will help to prevent even bigger problems from spiralling later. Yet the Government seem unable to get to grips with the difficulties. This must be seen as a significant failure on the part of the Department for Constitutional Affairs, and it must know that the reintroduction of means-testing in itself will not solve the problem or make significant savings in relative terms. A review before implementation in the Crown court will, we believe, be intrinsic to the fulfilment of what the Minister said on Second Reading was the aim of the Bill:
	"a legal aid system that balances fairness with administrative simplicity and that is based on affordability yet is sensitive to an applicant's individual circumstances."—[Official Report, 13 December 2005; Vol. 440, c. 1238.]
	All in all, the Government must recognise that the Bill is not a panacea for all the problems to which the legal aid system has been exposed. Although we welcome it in principle, it is only a small step towards desperately needed reform of a legal aid system that the Government have allowed to fall into disrepair, and much more remains to be done. The Department for Constitutional Affairs must know that the Bill in itself will not solve the problems.
	The Government must recognise, particularly when producing the regulations that will follow the Bill but also when introducing the scheme into the Crown court, that what is needed is not simply restriction of the number of people being helped by the legal aid system as the Bill proposes, but what was proposed in the Government's own report "A fairer deal for legal aid": a system that is
	"fair and effective, providing access to justice for all who need it."
	I remain to be convinced that the Government have responded to their own message.
	If, despite our general support for the Bill, the Minister thinks that we or the legal profession will accept the Bill as the answer to the legal aid crisis, she will need to think again.

Keith Vaz: In response to the amendment tabled by the hon. Member for Somerton and Frome (Mr. Heath) in the last debate, the Minister referred to a coincidence of desire. Until the hon. Member for Huntingdon (Mr. Djanogly) got to the last part of his speech, I felt like a gooseberry watching not consideration in Committee being reported back to the House, but a love-in, so generous was the praise between those on the Front Benches and so amicable the discussions and various deliberations in Committee and in the House since consideration of the Bill began.
	I pay tribute to the Minister and her colleagues at the Department for Constitutional Affairs on the modernising agenda that they have adopted since my noble Friend Lord Falconer became Lord Chancellor. There must be something of a whirlwind in the Department. I remember my time there as a Minister six years ago, when it was not so much sleepy, but at least not as dynamic as it is now. Legislation rushes out the door at breakneck speed and Ministers appear before the House practically every week to tell us about new legislation that is to be passed.
	The Bill is important, primarily because we want to save money on the very large legal aid budget. The hon. Member for Huntingdon will not remember the debates held in the House when I was first elected, when the legal aid budget was, even under the last Conservative Government, spiralling out of control. The current legal aid budget is £1.1 billion, which makes the DCA one of the biggest-spending Departments.
	The savings that the Bill envisages are quite small—only £35 million out of £1.1 billion—but £35 million is a lot of money. It is better than a poke in the eye, and any legislation that saves money for the taxpayer so that it can be spent wisely is to be welcomed. Therefore, I welcome the Government's approach of targeting legal aid so that it is spent on those who need it. The Minister gave the examples of the lottery winner and the football player, but there are a lot of people in between them and the very poor who must not be left out.
	My main concern, in accepting what the Government have done and supporting the Minister in the good work that she does at the Department, is that too much trust and faith are being put in the Legal Services Commission. Once the decision-making process is taken away from the judges and the courts, removing that degree of independence and putting it in the hands of bureaucrats, some of whom are ex-civil servants—not that we have anything against them; I shall use the term "officials", if I may call them that—our ability as Parliament and that of people who apply for legal aid to feel that they have had their case justly treated are also removed.
	The Minister accepted the amendment tabled by the hon. Member for Somerton and Frome, and I welcome the spirit in which she did that, but I ask her to spend her time and efforts in supervising and monitoring what the Legal Services Commission does. It is dispensing a huge amount of public money, so both ministerial eyes need to be firmly on those who govern the commission. The Minister should be willing to respond to the concerns of Members of the House, the public and the professions when they point out that things are going wrong.
	My hon. Friend the Member for Cardiff, North (Julie Morgan), who unfortunately has had to leave the House, has raised with the Minister, as I am doing again today, her concern and mine about the proposals to stop the specialist support services in England and Wales, which are, instead, to be provided by the Legal Services Commission. My hon. Friend tells me that they will be stopped in July. I see that the Chairman of the Constitutional Affairs Committee, the right hon. Member for Berwick-upon-Tweed (Mr. Beith), and other members of the Committee are here today. We discussed this very matter yesterday.
	The concern held by my hon. Friend the Member for Cardiff, North and by me is that these services are being stopped when the Government should be ensuring that we target our money so that services that work—providing assistance and advice to voluntary organisations on issues such as debt, housing and welfare benefits—should continue. I ask the Minister to look into that point at the same time as she is asking us to put our faith in her judgment and that of the Lord Chancellor in transferring yet again so many powers to the Legal Services Commission.
	The hon. Member for Huntingdon is right; in a sense, the Government are the victims of their own success. Having taken power in 1997 and having told the public that they would catch criminals faster, that is what they have been doing. But that puts pressure on the court system, which goes back to an earlier point concerning the relationship between the DCA and the Home Office. The DCA is an equal partner with the Home Office. The Home Office is not in charge and the Home Secretary does not tell the Lord Chancellor what to do; I am quite sure that the Lord Chancellor is robust in his dealings with the Home Office. But our great success in catching criminals and reducing the number of crimes committed has resulted in an increase in the legal aid budget.
	I see my hon. Friend the Member for Rhondda (Chris Bryant) looking at me. Clearly he will soon be gesticulating to tell me to bring my speech to a close and, as I am quite afraid of him, I will do so. I have enormous respect for my hon. Friend the Under-Secretary, who has done good work on immigration appeals. I ask her to listen to the professions and not to fight with them.
	I have read the Law Society brief on this and it has no problems with what the Government are doing, apart from the effect on the right of appeal. I ask my hon. Friend to work with the professions and with those who help those going through the legal system. I am sure that the good will generated for most of this afternoon will be generated again by similar legislation that I am sure my hon. Friend will propose in the years to come.

David Heath: I must say to the hon. Member for Leicester, East (Keith Vaz) that it is paranoia of the highest order to be afraid of the hon. Member for Rhondda (Chris Bryant). However, I agree with some of what the hon. Member for Leicester, East said.
	There are few months of the year in which I bemoan the dearth of legislation coming from the DCA and the Home Office. Indeed, sometimes it feels as though one does nothing else but read new legislation. However, the hon. Gentleman is right about the relationship between the two, although I would argue that we should have a ministry of justice to take on all criminal justice responsibilities. If we create 800 new offences, people will be tried for them and that costs money, which is where the increase in legal aid comes from.
	I believe legal aid to be one of the great glories of this country. The fact that we are prepared to institute a pillar of our welfare state to provide for people who need representation before our courts is something to be rejoiced and not slighted; it is a necessary part of a civilised society.
	I pay tribute to the Under-Secretary, who has finally discovered how to pronounce my constituency, to the point that she corrects others. That is a wonderful advance in a short time. She and other Committee members have done a fine job. We debated the Bill and, we hope, improved it, but we did not take an unnecessary amount of time to do so. The fact that we have managed to complete consideration does not suggest a lack of care or scrutiny. It is a simple fact that this is a brief Bill with few complicated proposals that, therefore, does not require long consideration. But we have pointed out what is lacking in it.
	It would be easy, were it not for the constraints of the rules of the House on Third Reading, to launch into a much wider debate on the future of legal aid, as it is a serious issue that needs debating. This debate, however, deals with a narrow point. It would also be extremely valuable to pick up on the point made by the hon. Member for Leicester, East and his hon. Friend the Member for Cardiff, North (Julie Morgan), and I hope that the Minister can enlighten us as to the loss of specialist officers in the Legal Services Commission.
	This measure deals with eligibility for criminal defence legal aid. Two issues arose in Committee, the other place having dealt with the major issue of the capacity to appeal in the interests of justice. One was the issue of the residual power, which was raised by the new clause. I still maintain that that would have been an improvement to the Bill, that it would have created a better, more appropriate way of dealing with exceptional cases, and that it would have saved a little money in the process. The Minister has not, however, accepted that.
	The other issue was that of appeal. I have said that I believe that the amendment from the other place was wider and better in its scope, but I repeat that I am grateful to the Minister for listening to my points and arranging for me to meet her officials to discuss whether a compromise was possible, and for accepting the amendment to the Bill today. I say with a degree of confidence that I think that it will satisfy those in another place who will consider the matter later.
	The Minister must not be allowed to get away with the fact that the Government marched us up this hill only a few years ago and are now marching us down again. Consistency is not the Government's strongest point in their approach to this issue. That said, I welcome what has been put in place today to curb what, to the layman, and to an interested observer, are abuses of the system. I welcome the fact that the Government have not reintroduced a crude threshold for means tests but have taken a more sensitive and sensible view about the taper that should be applied, which I commend.
	I return to a basic point: nobody wants to see a lot of money spent on legal aid until they need that support to defend themselves in court. It not just millionaires, or those without means, that we are dealing with. It is those in the middle who are most affected when, in extreme circumstances, they find themselves before the court and unable to receive the support that they need to present their case properly. Those people must be clearly in our minds when addressing the Bill. The Bill goes a long way to deal with some of those issues. The wider issues of legal aid in the criminal and civil courts will wait another day, but the Minister can be assured that we have extremely strong opinions on those.

David Burrowes: I support the Bill, particularly in relation to the restoration of the means test and the fact that the Government have learned from their mistakes. In terms of the detail, I welcome the fact that the application of the means test will be much more straightforward and less bureaucratic. I remember the days of the old means applications, when a paper trail among a pile of wage slips or statements was necessary, but I understand that the regulations will introduce a much more straightforward procedure.
	I have some fundamental reservations, however, which revolve around the conferring of powers on the Legal Services Commission. In that regard, I support the comments of the hon. Member for Leicester, East (Keith Vaz). On grounds of principle and practice, we are concerned that the courts' remit will be taken from them. We sought in Committee to retain the residual power. We sought through new clause 1 to retain it as an exceptional power. Both those attempts failed.
	Can the Minister give us assurances in relation to the practical application of the conferring of powers to the Legal Services Commission? I draw her attention to page 13 of the supplement to the framework document. It states:
	"If . . . the Interests of Justice test is not applied consistently across the country . . . the LSC would issue guidance to court staff about the application of the test."
	Then the threat, which raises those fundamental concerns, comes into play. The document suggests that there are two options:
	"Ultimately, the Government could amend schedule 3 to the Access to Justice Act 1999 to clarify the working of the Interests of Justice test. Alternatively"—
	this is the nuclear option—
	"it could choose to have the award of grant, including determination of the Interests of Justice test, administered solely and directly by the LSC, without the involvement of court staff."
	That option was a matter of concern on principle, but now that we have moved beyond that, it is a concern in practice.
	The Minister has justified the Bill on the basis that court staff will be involved in the application of the new regulations. That makes sense because they are on the ground. They know the best way of maintaining the system in terms of granting legal aid and assessing financial eligibility. They are closest to the decision making. They will be able, practically and quickly, to make the decision. Therefore, I ask her to give an assurance that the final option of devolving the practical powers so as not to involve court staff will not be proceeded with and that, at the very least, if the guidance does not work in the Government's eyes, they will seek to bring the matter back before the House to amend schedule 3 to the Access to Justice Act 1999 to deal with the working of the interests of justice test, and will not go straight to the final option, take all the practical powers away from court staff and give them to the LSC. At that point, the concerns of the hon. Member for Leicester, East, practitioners, court staff and others would come into play: decision making would be far removed from where it should take place, which is in the court building. Will the Minister directly respond to that?
	This is not the place to do it, but I point out that it is estimated that there will be a saving of £35 million through the application of the scheme. Can that be properly taken into account when Lord Carter's review is published and when consideration is given to how to deal with lower courts' work? It has been accepted by the Department that lower court costs are under control already. We now face the prospect of £35 million savings. Can we properly take account of that and allow that to form part of the judgment before proceeding to, from the practitioners' point of view, another nuclear option: competitive price tendering, which raises concern that the work and service of many local practitioners for the community, not least black, minority and ethnic firms, will be threatened?
	Primarily, I seek assurances on the practical implementation of the system in terms of transferring powers from court staff and conferring them on others.

James Brokenshire: I broadly welcome the introduction of the Bill, particularly in the context of the cost issues affecting legal aid. Since 1997, the legal aid bill has grown from £1.5 billion to around £2.36 billion for the current year. That emphasises the need to tackle that issue urgently, particularly when one considers the different balance between civil legal aid and criminal legal aid. The funding to civil legal aid has gone down by about 1 per cent. during that time, showing that it is the criminal side of legal aid that has seen growth in expenditure.
	It is interesting that, when the Government introduced their previous proposals, which effectively scrapped means-testing, in the "Modernising Justice" White Paper, they described means-testing as complex and costly, highlighting issues where lack of documentation led to delays and the further costs associated with that. They talked about it being an unjustifiable waste of money. It is interesting to see how the debate about and, perhaps, the recognition of the need for some form of means-testing has come back. For this to work and to make the potential savings of £35 million that my hon. Friend the Member for Enfield, Southgate (Mr. Burrowes) talked about, it will require good administration, not the bureaucracy that some hon. Members fear may exist in the Legal Services Commission. That needs to be monitored carefully if we are to get the hoped-for cutbacks in the increase in spend through means-testing. For that to happen, we must not get bogged down in a mire of bureaucracy and administration.

Keith Vaz: The problem remains that good legal aid practitioners are leaving legal aid work because the rates are so low. It is not that they wish to make a huge profit from it; it is the fact that they cannot afford to continue in that work. That means that those who are not particularly good may remain to do the work because they can afford those rates.

James Brokenshire: The hon. Gentleman makes a valid point, which I was coming to, about access to justice and the quality of justice, support, advice and guidance that is received by the beneficiaries of legal aid. There is still a much wider debate to be had on the future of legal aid and legal services, which falls outside the scope of today's debate. Clearly, we need to ensure that legal support is there where it is needed and that where it is needed, it is robust and of sufficient quality to ensure that those individuals are properly represented. I agree with the hon. Gentleman, who also sits with me on the Constitutional Affairs Committee. I suspect that we in that Committee will continue to monitor this in the months and years ahead.
	We need to monitor the impact of these provisions. I understand that they will be introduced in magistrates courts first and the Crown court thereafter. Obviously, the Minister will closely monitor the impact of that, particularly where offences can be tried in either court, and whether people elect to go down the Crown court route because of the flexibility that might remain there following the introduction of these provisions.
	There have been interesting comments about the reasons for the growth in the budget. The hon. Member for Somerton and Frome (Mr. Heath) highlighted the fact that we have seen an increasing number of offences on the statute book. Clearly, changes to sentencing guidelines have had some impact, in terms of the greater risk of imprisonment, giving rise to demands and needs for access to justice and fair justice, ensuring that people are properly represented. We must not forget the argument about the inequality of arms. We cannot have people feeling intimidated or threatened by the power of the state seeking to impose criminal penalties, and the fact that they cannot be adequately represented or defend themselves.
	I remain struck by the comments of my hon. Friend the Member for Enfield, Southgate when he moved his new clause in an attempt to ensure that the less advantaged and perhaps people with mental health problems are not disadvantaged by the Bill. I urge the Minister to monitor this closely to ensure that people from less advantaged backgrounds, people who are illiterate or people with a disability are not prevented from gaining access to justice. I am sure that that is not the intent of the Department for Constitutional Affairs. I ask the Minister to keep this under review and ensure that the fairness that is the hallmark of our justice system remains.
	I am pleased that there has been some movement—particularly in another place—on the clarification of appeal rights; such clarification has been an important part of this legislation's development. We must make it clear that there is a separate means of ensuring that, where necessary, the Legal Services Commission's decisions are scrutinised in court. We will need to monitor the system's operation and performance in order to establish how many of the LSC's decisions are successfully appealed. If many are, that would tend to suggest that there are problems with the system's administration, and with the way in which decisions are being determined.
	Last July, the Constitutional Affairs Committee's report on the Bill stated:
	"Legal aid plays a vital role in ensuring that those who cannot afford their own defence costs can still obtain legal representation. It also protects against unfair trials and 'inequality of arms' between the defendant and the prosecution and makes it easier to protect defendants' rights."
	They must be the underlying principles driving the changes being implemented today. I welcome the Bill, but I hope that it will continue to be scrutinised as it completes its legislative passage, that the aims and objectives effectively summarised by the Constitutional Affairs Committee are put into practice, and that we have a strong and robust system that continues to deliver high-quality, effective and cost-effective justice.
	Question put and agreed to.
	Bill accordingly read the Third time, and passed, with an amendment.

Public Accounts

Edward Leigh: I beg to move,
	That this House takes note of the 17th and the 20th to the 52nd Reports of the Committee of Public Accounts of Session 2003–04, the 1st to the 30th Reports of the Committee of Public Accounts of Session 2004–05, and the 1st to the 3rd, the 5th, 6th, 10th and 11th Reports and the First Special Report of the Committee of Public Accounts of Session 2005–06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memoranda on these Reports, Cm 6271, 6282, 6302, 6303, 6304, 6332, 6355, 6416, 6441, 6458, 6468, 6496, 6577, 6578, 6579, 6609, 6667, 6668, 6682, 6689, 6712 and 6724.
	I am pleased to welcome Members to the Public Accounts Committee debate. It is the first of its kind since June 2004, and in the lengthy intervening period the profile of public sector efficiency, which has been at the heart of the Committee's work ever since its creation 140 years ago, has been raised, certainly in part, by the Gershon review. Given this context, we have a lot of highly topical issues to cover today.
	The Committee is proud of its work since our last debate. We have published no fewer than 76 reports on issues at the very top of the policy agenda, including 21 in this Session so far. Our high profile and hard-hitting output has included a report on UK military operations in Iraq. That report recognised the commitment, bravery and professionalism of our armed forces, but noted shortcomings in the channelling of supplies to front-line forces.
	We also considered the uncertain future of renewable energy, advising the Government to subsidise the development of new technologies and to engage fully in the nuclear power debate. We further concluded that the operation of tax credits has been an absolute nightmare for a significant minority of claimants, who cannot understand how much they are due, or why, in so many cases, such large overpayments have been made.
	We also highlighted a simply unacceptable postcode lottery in the prescription of anti-cancer drugs, waiting times for scans and chemotherapy treatments. We found that people who live in a northern city are almost twice as likely to die of cancer as those who live in an affluent area in the south. The cancer of those who happen to live in a deprived area is likely to be much more advanced by the time that it is diagnosed, and they are less likely to survive. We urged the Government to address that issue as a matter of urgency.
	Many of the Committee's recommendations have been implemented in the past 18 months, thereby translating them into practical service improvements for the taxpayer. Some 276 of the Committee's recommendations—93 per cent., which is way above the percentage achieved by any other Committee—were accepted by the Government in 2004–05. I pay tribute to the Treasury for accepting 93 per cent. of our recommendations; its doing so is entirely in line with the cross-party nature of our work.

Ian Davidson: The hon. Gentleman said that 93 per cent. of the Committee's recommendations had been accepted. For purposes of comparison, what was its record under previous Chairmen? Has he achieved a higher or lower proportion, and does he set himself a target?

Edward Leigh: I am sure that my very distinguished predecessor as PAC Chairman achieved just as high a rate. He has moved on to even better things, and I do not want to criticise him in any way, but the Committee has gone from strength to strength over the past four or five years. That has nothing to do with me—I have just happened to be Chairman in that time—but it does have to do with the structure of the Committee, the National Audit Office and many other factors. Things have gone pretty well.
	I shall offer only three or four examples of our successes, although I could go on and on. However, I regret that the Committee is also the Public Accounts Committee for Northern Ireland while Stormont is suspended.
	The Committee does not pull its punches, and our recommendations are hard hitting. We are consensual, but that does not mean that we go for the lowest common denominator. On the Jobskills programme in Northern Ireland, we said:
	"Our overall impression is that Jobskills is one of the worst-run programmes that this Committee has examined in recent years. We noted a quite astonishing catalogue of failures and control weaknesses, all of which pointed to a disturbing level of complacency within the Department."
	That programme has since been axed.
	The Committee's report on light rail projects stressed the need for rigorous financial viability tests prior to approval. As a result, the Department for Transport shelved plans for three new light rail developments because it realised that it could not guarantee against price escalation. Last year, the Committee highlighted the fact that the Inland Revenue had adopted many of the recommendations proposed by the PAC six years previously. As a result, it had become 66 per cent. more efficient in its administration of inheritance tax.
	The Committee also reported recently on Energywatch and Postwatch, which we described as "feeble". We suggested that those bodies could reduce costs by re-examining their regional structures and sharing administrative functions. In response, Postwatch centralised its complaint handling function in Belfast, and Energywatch, with the support of Postwatch, set up a consumer action network to find ways to achieve better joint working.
	It is a testament to the Committee's work that our recommendations on the private finance initiative and on public-private partnerships have saved the taxpayer no less than £750 million, according to the NAO. If the Committee's members were paid on a commission basis, we would not need to remain Members of this House for very long.
	Complementing the impacts that I have described is the increasing scale of media coverage enjoyed by the Committee, which is greater than that received by other Committees. That degree of attention to our work can only aid us in pressing for value for money.

Sadiq Khan: Is the hon. Gentleman concerned that the media sometimes highlight our criticism of the Government, and pay less attention to the occasions when we praise Departments on their efficiency?

Edward Leigh: That is the media's besetting sin, but we try to structure our reports and press releases so as to strike a balance. We try to pay tribute to the Government when things go right, but it is the nature of the media that they engage in negativity and prefer criticism to congratulation. However, in its reports, the Committee tries hard to congratulate the Government—the customer—when they have done well. We do our best in that regard.
	It is a tribute to the Committee that we do not get involved in policy. We deal in the nuts and bolts of things. We are not policy wonks, as we engage in what people care about. That is why we get considerable coverage. For instance, the entire front page of today's edition of The Independent is devoted to one of our reports, and the same happened with The Guardian earlier this week. It is proof of my consensual nature that I have actually started to read those newspapers.
	Credit for the Committee's achievements should go, in part, to hon. Members who have departed the House since the last PAC debate. We are sad that they have left, although I see the hon. Member for Dagenham (Jon Cruddas) in his seat. However, I am confident that the new members will help carry forward the momentum generated by their predecessors. I welcome to the Committee my hon. Friend the Member for Tunbridge Wells (Greg Clark) and the hon. Members for Burnley (Kitty Ussher), for Bishop Auckland (Helen Goodman), for Bristol, West (Stephen Williams), for Orkney and Shetland (Mr. Carmichael), for Portsmouth, North (Sarah McCarthy-Fry) and for Tooting (Mr. Khan). I also welcome to the Committee the hon. Member for Great Grimsby (Mr. Mitchell), who, ironically given the relative youth of some of the members of the Committee, is the newest member of the Committee, and a valuable member too. He has already turned up pretty well every time and, in his usual robust style, has given permanent secretaries a real grilling. We welcome him.
	Irrespective of how long hon. Members have been in the House, I am sure that each and every member of the Committee will continue to add something uniquely valuable to our work. Members of the Committee both past and present will understand the hard work and commitment that membership demands. We meet twice as often as any other Committee. So I know that I will not be alone in expressing my thanks and deep gratitude to Mr. Nick Wright, our Clerk, and others who support the Committee, especially the National Audit Office. It is no secret that without the NAO we would not be able to do anything.
	We must also remember all those who have served on or worked for the Public Accounts Committee in the past decade. The Committee has issued more than 400 reports and questioned hundreds of senior officials. Witnesses have provided the Committee with vital insights into the challenges that they face in their ongoing battle to improve public services.
	I want to outline this afternoon the key findings emanating from the Committee's reports over the past 10 years—findings that are present in the Committee's work since my last address and which lie at the heart of current policy discourse on achieving value for money in the delivery of public services.
	Indeed, as the parties come closer and closer together on policy—[Hon. Members: "Ah."] I make no comment on that, of course. The debate on how policy is implemented is even more important. That is why the role of the PAC is ever more central.
	If one lesson stands out from the work of the PAC over the years, it is that Government Departments in any Government are masters of spending public money, but often far less proficient at ensuring that it translates into better public services. It is in keeping with the non-partisan nature of today's debate and of the Committee to say that the problem has plagued Governments of all persuasions over the years. The Committee recognises the difficulties involved and that often the processes are much more complex and much larger than those in the private sector, especially with IT projects. However, some progress has been made. The Committee has commended the Government's efforts to develop more effective services for older people. Our report on emergency hospital care identified a large and sustained reduction in the length of time that patients spent in accident and emergency.
	Welcome as such improvements are, for many years the Committee has also pressed Governments to devote greater attention to public sector efficiency as, all too often, they have failed to learn the wider lessons of the Committee's recommendations. While supporting the good intentions expressed by Gershon, the Committee would like to see practical evidence of real-life efficiency savings being realised. Departments are responsible for delivering those savings, and the Government's programme of departmental capability reviews designed to assess Whitehall's ability to implement policy effectively is significant. The Committee has noted many times that policies are too often cursed by weak management and implementation approaches. We welcome the recent development, but we would like more information on how the programme will be taken forward and rolled out.
	Despite those welcome initiatives, however, more must be done to achieve value for money in public services. I shall devote the rest of my speech to outlining the Committee's seven recommendations for getting more out of our public services. Hon. Members can study those recommendations in greater depth by referring to the Committee's 17th report of the current Session, entitled "Achieving value for money in the delivery of public services."
	The first recommendation is that those responsible should properly prepare and plan project implementation. Successful implementation rests on careful planning that takes into account a programme's risks and business requirements. Now, all that can be just anorak talk, but let us look into some practical examples. The Committee concluded in its report on asylum decisions that the Home Office failed to put in place sufficient staff and structure to cope with a significant rise in asylum applications in 1999 and 2000. In its report on road congestion, the Committee criticised the Highways Agency for installing cheaper, less sophisticated technology in the south-east in order to close a technology gap between the regions on the basis that it would be upgraded at a later date. Had the agency not reversed that decision, it would have cost £64 million more than progressively installing more sophisticated technology from the outset. To avoid such fiascos in future, Departments need to draw up realistic timetables and leave plenty of time for planning and detailed specification. The Committee would also like to see greater use of pilots to test schemes before their large scale implementation.
	Secondly, Departments must strengthen project management. Time after time, the Committee has come across poorly managed Government projects. One ofthe most alarming examples of poor project management was the Government's purchase of eight Chinook Mark 3 helicopters that could not be used because the Department failed to specify the avionics system when it drew up the contract. No doubt the Chinooks have been consigned to some remote aircraft hangar, but it is something of an understatement to say that they are doing very little to promote our national security.
	Like defence procurement, IT procurement is all too often synonymous with delay, overspends, poor performance and even abandonment. Encouragingly, our report assessing the impact of the Office of Government Commerce's initiatives on the delivery of major IT-enabled projects recognised the potential for gateway reviews to secure significant improvements in IT procurement. We also called for gateway reviews to be published, and recommended that the Comptroller and Auditor General be notified where IT projects get "double reds" within that process. I am encouraged by the OGC's agreement to our latter recommendation, but disappointed that it has rejected the former.
	The Committee continues to recognise the need to strengthen project management capabilities. Departments need more realistic business cases and time scales, and risk must be understood and better managed. Large, complex projects should be broken into smaller, more manageable components, and reliable contingency plans should be put in place.
	Our third proposal concerns the need to reduce complexity and bureaucracy. Too often, public services are unnecessarily complex and bureaucratic. For example, the difference in error rates in passport application forms that are checked by the Post Office for a fee and those submitted directly by customers—1 per cent. and 15 per cent. respectively—shows that people have difficulties with that particular form. The Committee has pointed out that Departments have an obligation to make sure that their forms are straightforward and easy to complete. Looking across Government, the Committee has called for the simplification and streamlining of complex processes that increase costs. For example, the structure of the social fund is so complicated that mistakes are made in almost half of the applications for certain benefits.
	The fourth recommendation is the need to improve public service productivity. Delivering quality public services rests on their efficiency and productivity. Our report into sickness absence in prisons confirmed that unusually high levels of sick leave were detrimental to the overall efficiency and productivity of the Prison Service. As well as costing the taxpayer around £80 million in 2002–03, sickness absence increases stress and lowers the morale of other staff. In that particular case, I am pleased to note that the Minister recently reported that in nine of the 10 prisons with the highest levels of sickness absence as identified in our report, sick leave has been reduced by 36 per cent. since 2002–03, which is an example of a report making a difference.
	Much still remains to be done to improve public service productivity. The introduction of resource-based accounting and budgeting is certainly a step in the right direction, because it helps Departments to use their resources more productively and deliver their services more efficiently. Welcome though these developments may be, Departments still have some way to go in improving public service productivity. They need to match resources better to work load to meet the public's demand for services, and they should tackle bottlenecks in service delivery chains.
	Fifthly, we believe that Departments need to be more commercially astute. Such measures have already been introduced in Britain's biggest and best companies. Indeed, the Committee thinks that Government Departments can learn a lot from boardrooms throughout the country. When one considers that central civil service Departments alone spent more than £15 billion a year on goods and services, it is vital that they demonstrate that they are commercially astute. All too often we find that Departments are lacking in that area. The Committee reported that fewer than a quarter of procurement staff in Departments had Chartered Institute of Purchasing and Supply qualifications. Of the 20 Departments, agencies and non-departmental public bodies that spent the most on procurement in 2002–03, only three had commercial directors. Their role explicitly covered all corporate engagement with the private sector and the wider business world, as well as procurement strategy.
	I am pleased to note that the situation has since improved, but Departments must do more to strengthen their commercial expertise if they are to maximise their assets for public benefit. Across the Government as a whole, the Committee wants Departments to take greater advantage of their buying power to secure better deals, to award contracts on the basis of value for money instead of lowest price and to make greater use of partnership arrangements with suppliers.
	Sixthly, there is a need to tackle fraud. Fraud has been a long-term concern of the Committee. In addition to producing a report on benefit fraud, it found during its investigation on VAT that a staggering £11 billion of VAT that is meant for the public purse is going into the pockets of fraudsters, cheats and those making genuine errors. We urged Customs to introduce tougher penalties for evasion and the under-declaring of VAT. We called for it to take full advantage of its merger with the Inland Revenue to improve data matching as a means of identifying traders in the shadow economy.
	We also highlighted the problems among European member states on agreeing what actually constitutes fraud. In our report entitled "Financial management of the European Union", we recommended that the UK presidency of the European Union should be used to support the Commission in its action to improve accountability in the European Union through the development of a road map towards a positive statement of assurance. We also called on the Government to press for the simplification of the rules and regulations governing the common agricultural policy and structural funds to reduce the scope for fraud and error. Now that the UK presidency has come to an end, can the Minister detail the extent to which the Government have implemented those recommendations? Will he give assurances that the UK will continue to press for those vital reforms during the Austrian and French presidencies and beyond?
	Seventhly, I urge the Government to implement policies better and in a more timely way. It is important that they have clearly thought-through implementation plans and reliable information on which to base decisions about new policies. For example, the Committee's progress report on hospital-acquired infection highlighted the worrying dearth of information about the extent and cost of such infections. For example, the regularly cited figure of 5,000 deaths each year due to hospital-acquired infections is unreliable and dates from the 1980s. Good policies and successful implementation rest on the availability of reliable and up-to-date information. It is imperative that Departments understand the scope of problems before they set about addressing them.
	As I have outlined, the Committee makes a valuable contribution towards the development of more efficient and effective Government policies. In the coming months, we shall face numerous opportunities to add to our work. We shall continue to deal with the access issues raised by Lord Sharman's report of 2002 on the   audit and accountability of central Government. The Committee is delighted that Lord Sharman's recommendation that the Comptroller and Auditor General be given audit access to non-departmental public bodies that are companies and their subsidiaries has been taken forward in the Company Law Reform Bill. The Committee would like to thank the Treasury and the Department of Trade and Industry for their support on this matter and looks forward to the smooth passage of the Bill in the near future. However, we just hope that similar progress can now be made on gaining full access to the BBC's accounts. The Committee has valued the experiment that has allowed the Comptroller and Auditor General, under special arrangements, to have limited access to the BBC. However, as I have said in the past there should be no limit on the freedom of choice of the Comptroller and Auditor General if the licence fee payer is to be assured of value for money. The expected renewal of the BBC charter, which is scheduled for later this year, provides the perfect opportunity to address the matter.
	The Committee's formal agenda includes hearings on the National Audit Office's major defence projects report for 2005, and reports on supporting elite athletes, faster access to better stroke care, the closure of MG   Rover, corporation tax, and improving poorly performing schools, to name but a few.
	In conclusion, the distinguished Committee of which I am proud to be Chairman continues to serve the nation well, analysing important and topical issues and recommending practical improvements to our public services. I commend its work to the House.

Iain Duncan Smith: On a point of order, Mr. Deputy Speaker. I do not usually raise points of order, and this has nothing to do with the debate. It has struck me in the past 24 hours, particularly in the past two hours, that developments of remarkable significance are taking place in the Gaza strip and Israel, with Hamas claiming to be the majority party after the recent election.
	We have had statements from most countries concerned, including the United States. We know what Israel's attitude is—it refuses to deal with Hamas until certain conditions are met. We know that large sums of money may be withdrawn from the Palestinians as a result of the election, and there are pending possibilities even of military action in the area. What we do not have is any sense of the Government's position with regard to that remarkable election result.
	I have just heard that within the past hour the Prime Minister made some form of statement to the media, yet no member of the Government sees fit to come to the House. As we are not sitting tomorrow, have the Government indicated to you when they are likely to treat the House with courtesy and give us some indication of what their attitude is and what their responsibilities will be as a result of the election?

Mr. Deputy Speaker: I am not aware of any request from the Government to make a statement on the matter. Equally, the Chair is unaware of the contents of anything that is being said by the Prime Minister or any other senior Minister on the subject. The Minister on the Government Front Bench will have heard what the right hon. Gentleman said. The situation could be remedied within the earliest possible period and the right hon. Gentleman could seek to encourage that by putting in a request for an urgent question. Mr. Speaker has always indicated that Members impatient for information can try that route, even though he does not guarantee that he will be able to grant it. The House will also have heard what the right hon. Gentleman said, and we must await developments at the earliest possible moment.

Jon Cruddas: I want to say a few words about my experience as a member of the Public Accounts Committee, although I feel a little like an impostor this evening, as I ceased to be a member of the Committee just before the last election because of issues that were developing locally in my constituency relating to community cohesion and demography. In one sense, the reason that I came off the Committee is one of the reasons that I am interested in the debate about the workings of the PAC and am keen to participate in its work in the future.
	I am particularly interested in the relative efficiency of state activity through investment in the reform of public services, alongside a more dynamic analysis of demography and resource allocation with reference to spatial economic development and population movements, especially in urban communities. That is the context for my remarks. I was a member of the Committee at the time that it prepared some of the   reports to be discussed today, and some of the comments that I made then related to the question of how the state could keep up with and make sense of rapid movements of populations, especially in urban communities in cities such as London, and especially in poorer parts of the city, such as the east side of London, which I represent.
	First, on the working of the Committee, I, too, want to put on record the extraordinary servicing of the Committee supplied by Nick Wright and his team. They do an admirable job and are a credit to the public service. I pay tribute to the work of the National Audit Office, the rigour of its analysis and contribution to public debate, and the amount of money that it saves taxpayers. The PAC is a unique space to consider the relative efficiency of state activity, in that it allows for discussion of a pan-governmental strategy and with accounting officers and key civil servants. We are not just awash with the contributions of politicians.
	The issues that the PAC covers are centre stage politically. The unanimity reached on the Committee's work, despite the fundamental fault lines between the departure points from which the different parties consider the activities of the state, has always interested me. I sense that the Conservative party, for example, sees state intervention as essentially destructive to the efficiency of economic interrelationships, whereas the Labour party deems the relative properties of state activity from a more benign departure point. It is interesting to see how those are reconciled in the Committee's work, which is a comment on the abilities of the Chairman.
	On investment and reform, I want to address the issue of demographic movements in urban communities. A number of the debates in and reports of the PAC inherently assume that there are static populations and therefore static issues of resource allocation, but there might be a case for trying to build in a more dynamic analysis of the sheer scale of population movement below the radar. I shall give a couple of examples.
	I recently asked a number of parliamentary questions about the population of the borough of Barking and Dagenham, of which I am one of the representatives. The Office for National Statistics replied that the population stands at 164,600 and that that has fallen since 2001, when it was 165,700. Anyone who lives in the community that I represent is aware that there has been massive migration into the borough. However, that is not caught in the headline assumptions for public policy purposes of the baseline quantitative allocation of resources to any public service.
	The Government have accepted that there is a minimum of 570,000 unauthorised migrants in the country, not including dependants, and the NAO has said that there are 280,000 failed asylum seekers in the system. From informal discussions with Ministers it seems that the assumption is that the majority of those people are in London, and they do not live in Kensington and Chelsea. There is a magnetic pull towards poorer communities and areas with lower cost housing. The cost of housing in Barking and Dagenham is the lowest across the city.
	Alongside those unauthorised migrants, the massive house price inflation over the past four or five years has created a magnetic pull to the area for families who aspire to their first step on the property ladder. The third element is that, as a result of the consequential effects of the right to buy, the private housing market has become much more vibrant. That has meant lower rents, which other local authorities have used as a reason to transfer a lot of their priority-housing families.
	Cumulatively, therefore, there has been a massive transfer of people into the borough. That is off the radar of the headcount for public policy making. I do not see how a dynamic analysis can be pulled together in order to interpret the relative efficiency of state activity—arguably in communities that are most in need of a dynamic form of state intervention. We have an extraordinary legacy of poverty and under-investment in poor quality public services. In trying to reconcile that legacy with the dynamics at work in global cities such as London, we return to the question of how to gauge the relative properties of state activity.
	The massive movement of people into the borough has not just happened over the past two or three years. Dagenham also sits centre stage in the so-called Thames Gateway, the population of which is set to rise by 700,000 or 800,000 over the next 10 or 15 years.
	The headcount in my borough, for public purposes, is about 165,000, and the assumption is that it will grow by 35,000 to 40,000 over the next 10 years. We can therefore assume a 33 per cent. increase in the number of people in the borough, even on the basis of the statistics that we currently use for public policy making. The data supplied by the Mayor of London from the Greater London Authority's data management and analysis group—"Statistics of schools in London"—demonstrate that, over the past three years, there has been an increase of more than 10 per cent. in the school roll in the borough. This is despite the fact that, for public policy purposes, the communities are deemed to be quantitatively static, in that they remain at 165,000. If we assume an increase in the population proportionate to the increase in the school roll, we can assume that the population figures could be at least 10 per cent. higher than 165,000.
	The tabulations showing the breakdown according to ethnic background in the borough's schools show an extraordinary demographic shift in the qualitative makeup or heterogeneity of the community. Over the past two years, the proportion of white British kids in the schools has dropped by more than 9 per cent., and, year on year, there has been a 4.5 to 5 per cent. increase in the number of children from black African communities in the primary and secondary schools. We can therefore begin to piece together the extraordinary transformation that is occurring in the size of the borough and, within that, the massive change in the demography of the racial makeup of the borough, neither of which is being caught by the analysis supplied by the Office for National Statistics for the purposes of public policy making in relation to the population of the borough.
	I shall tell the House why this is important. The reason that I left the working of the Public Accounts Committee was because we were having a massive outburst of far-right activity in our community. Over the past year and a half, we have had five local council elections, at each of which the British National party has polled an average of 35 per cent. of the vote.

John Hayes: The hon. Gentleman is absolutely right about migration being a key factor in housing demand, and consequently a factor in driving forward house price inflation. Does he agree that, since this Government came to power, public sector house building has roughly halved from its mid-1990s level? In addition, does he agree that a way of satisfying that additional housing demand would be to create a more fluid housing market in which more people owned their own home—as many people in public sector housing want to—which would create space for people currently in temporary accommodation who cannot get on to the public sector housing ladder?

Jon Cruddas: The purpose of my rather protracted walk through these statistics is to come to the issue of public service allocation, and public policy issues such as housing. We have seen a tripling of the number of people on the housing allocation and transfer lists as the population has expanded, which puts huge pressures on public services and deserves an adequate public policy response. The far-right activity to which I referred is one of the barometers of the pressures that are building up, and housing is one of the critical issues in that regard, as are health inequalities. Every issue relating to public policy investment needs an adequate public response, in order to make sense of the dynamic and extraordinary movements of population 10 miles down the road.
	That is why I want to come back to the workings of the Public Accounts Committee. The Chairman has talked about seven issues relating to the relative merits of public sector activity. I would like the Committee to add another. I would like it to develop an adequate analysis of the relative ability of the state to deal with the demography at work in our urban communities that is creating such pressure points in urban areas of Britain. My urban community is extraordinary, because of the sheer scale of the population movement into it and the qualitative changes within it. As I said earlier, the epiphenomenon of the far right is materially grounded in such dynamics.
	I want to return to some of the issues of public policy-making that lie behind that. I know that my hon. Friend the Financial Secretary is interested in the subject. Indeed, next week he will visit my constituency to examine some of those issues. There is a collision between a long-term legacy of poorly performing public services and poverty, and the extraordinary change that has created the scene on which the far right is operating. Some of its activities are grounded in issues of distribution that are geared by that extraordinary movement of people.
	The situation puts enormous pressures on the state, both nationally and locally. The Government have an incremental strategy to refinance public services; the question is, can they tread water, let alone tackle a moving target in the form of growing populations that are not captured in the headline head count on which public policy is based? All the change has occurred since the last census, and the population figures on which public policy is based assume that the population is falling. None of that includes unauthorised migrant workers. According to some estimates, this city has a population of 7.4 million and could contain 100,000 extra people somewhere, over and above the formal head count.
	I realise that all that raises huge issues of public policy, but I ask the Chairman and the Committee to bear it in mind when considering their future programme.

Kitty Ussher: I believe that my constituency contains more BNP councillors than any other constituency in the country. We certainly need to consider the way in which Government policy responds to extreme and fast changes in demography, but the population is increasing not just in urban areas but in all areas where there is a sudden shift in the economy. My constituency is simply a town, not a city, and house prices have collapsed in recent years, although they are now improving to some extent. We should take account of the critical nature of change in the economy, rather than the direction in which it moves.

Jon Cruddas: I do not want to be too definitive in identifying the turning points that create such phenomena. I merely wish to draw attention to certain issues that need to be considered in different ways in different parts of the country. East London has a rapidly growing population. Public policy-makers cannot keep track of it, let alone get ahead of it. That is before account is taken of illegal migrants who are invisible for public policy-making purposes. Then there is real-terms house price inflation, and on top of that the long-term legacies of poverty, underinvestment and poor-quality public services. A rich seam is created on which, given our social formation, the far right is manifestly able to work. That takes different forms in different parts of the country, but we should be acutely aware of the way in which demography can contract or expand, and the effect on social cohesion in any part of the communities that we represent.
	My borough has long-term problems of health inequality. I believe that, apart from Easington, it has the worst health-equality profile in terms of investment per head. Two years ago, the Government said that they would overcome some of the health inequalities and move us closer to the formula for investment. The resulting increase will kick in this April. Arguably, since the Government decided to invest so that we could move to where we should have been in 2001, the population has moved even further from the baseline for such decisions. In real terms, therefore, the health inequalities are worsening despite the Government's attempts to resolve them. I use that as an illustrative example of the tensions that this creates in terms of policy making.
	Housing is the other acute issue in terms of public sector provision, not least in a community that was built on the principle of socialised housing—council estates.

John Hayes: I am reluctant to interrupt the hon. Gentleman's fascinating account of his local experiences a second time, but I am sure he agrees that, given the fallen nature of man, the best that any Government can do is mitigate the inevitable sorrows of human existence. The point that I was really making to him is that that is partly about what government does and does not do. By encouraging greater housing ownership, we could reduce the demand on public policy and on the Government to supply housing. That would enable social sector housing to pick up some of the slack, which, unfortunately, ends with people being housed in unacceptable temporary accommodation. The fluidity in the housing market that I have described is beneficial in that it reduces pressure on the Government and allows them perhaps to accommodate those who find themselves in difficult circumstances.

Jon Cruddas: It seems to me that that argument always rests on the assumption that there are sufficient economic activity and wage rates in a community to sustain people so that they can purchase any extra supply of private housing. In my community, which is the lowest wage-cost economy in Greater London, and given the house price inflation of the last four or five years, the private housing market is disappearing in front of people's eyes in terms of their capacity to get into it. That means that all roads lead back to public housing investment, which is part of the discussion that I will have with my colleague the Financial Secretary next week.
	I shall conclude, as I think I have made the point. I enjoyed working on the Committee and hope to sit on it again in future. It should begin to consider how it might add in a dynamic analysis of demography, especially in our urban communities, alongside this rigorous analysis of the relative efficiency of public sector activity in the economy.

David Heath: It is a great pleasure to follow the hon. Member for Dagenham (Jon Cruddas), who is right to point to the potential effects of failure of public policy in creating division in a community. I am glad he had the opportunity to make that speech.
	I applaud the work of the Public Accounts Committee, and indeed of the National Audit Office. It does an inestimably important job. I have never had the privilege to serve on the Committee, but before I became a Member of the House I was an audit commissioner, working in a similar area. The co-ordination between the Audit Commission and the National Audit Office is hugely important in itself. One thing that I hope we can establish is that there are no gaps between the two bodies, which are responsible for checking the use of public funds.
	I also pay tribute to how the Committee works. It clearly works with a degree of unanimity despite, as the hon. Member for Dagenham said, different starting points, although I suspect that those, to an extent, have been coalescing recently, with the possible exception of that of the Chairman, the hon. Member for Gainsborough (Mr. Leigh), whom I consider a real Conservative. The danger for real Conservatives is that they find themselves ghettoised, like socialists on the other side of the Chamber, and unable to have their position recognised by those on their Front Bench.
	The Chairman was also right to point out that the publicity attendant on the work of the Committee is hugely important. It gains an awful lot of publicity, for good reason, but that in itself is a spur to better performance. Indeed, the fact that the Committee exists is a spur to better performance. The fact that civil servants and Ministers know that they are accountable to such a body is important: even if they do not have a report written about them, they know that they might have to face a difficult interrogation.

Edward Leigh: On the key aspects, this is the only publicity—we are not supposed to mention this—directed at civil servants. None of our reports ever criticise the Labour Government or Labour Ministers. We never get involved in politics. It is important that civil servants know that this public spotlight is on them. That, as the hon. Gentleman says, is a spur to better performance.

David Heath: That is right, and the Committee should not be used for party political purposes. Every Member wants to see good, well performing public services. Irrespective of whether one agrees with the policies pursued by Ministers, the administration of public services must be as efficient and effective as possible. If it is not, there is a waste of public money that could be used for better purposes. That is the crucial importance of the Committee.
	The Committee Chairman referred to seven different categories of importance; I have three. I recognise that a lot of the work of the Government is good and is recognised as such by the Committee and the NAO. A lot of programmes are properly administered. However, there is certainly a need to examine where there is mismanagement, as was reflected in the comments of the Chairman, when there is the misguided application of policy, which is different from mismanagement, and when there is fraud.
	Mismanagement can cover a great deal but the particular point that stuck in my mind after reading the reports concerned procurement, which is a huge expenditure on the part of Departments. Procurement is a specialised activity and I know, from my experience as leader of a county council, that the capacity for making mistakes in large scale procurement projects in the public sector is enormous. At times, the public sector does not have some of the tools that are available to the private sector to do its work.
	We have more than enough examples of major errors in procurement, particularly in IT. That lesson still needs to be learned by the public sector and one has only to look at the Home Office to see a catalogue of disasters. That makes all the more important the amendment passed in another place recently that suggested that the NAO should break with tradition and pre-empt the passage of a Bill in order to look at the IT consequences of the identity card scheme.
	One area in which I am particularly interested is the tax credits system, which was referred to in the reports. Clearly there has been a breakdown of the tax credit IT systems, largely as a result of rushed procurement in the first instance, with Ministers demanding a system before it was ready. There were serious consequences for the Exchequer as a result.
	Defence is another area of concern. I was staggered by the findings of the Committee, which show that there is an overspend on the 20 large-scale defence projects of £5.9 billion, which, when coupled with the cumulative delay of 206 months revealed by the Committee, is a serious problem; not just in terms of value for money or the finances of the country, but in terms of the finances of the Department. That money should be spent on protecting our troops in theatres of war. That can and should be improved. I know that there has been progress as a result of smart procurement, but it is still not good enough.
	On the misguided application of policy, it concerns me that when we have significant divestment of Government assets, we get best value for them. The most immediate worry is in the MOD with QinetiQ. No one should be sanguine about the fact that if this company sells its shares at the top of the price range, it will give its chairman £26 million in profit, its chief executive £22 million and, if that were not bad enough—at least those people were working within the company—an American finance company, Carlyle, which chooses to direct its finances through Guernsey for tax purposes, will receive £623 million. Does that not suggest that, somewhere along the line, a national asset was sold at too cheap a price? I believe that it was, and that the Committee should examine that.
	Another aspect of misguided application of policy is in the area of health. Investment in the health service is unprecedented, which is very good news that we all welcome. The outcome, however, is that hospitals are still closing their wards to operations until the new financial year. Something is going seriously wrong when that is the case. The sooner that we get to the bottom of that, in terms of the application of policy, the better.
	My last point is on the broad area of fraud. Fraud is simply a form of theft. When it is fraud against public bodies or the Government, however, it is our money, corporately, that is being stolen. I want to return to the tax credit system. Clearly, there has been organised fraud against the tax credit system, through identity theft from within, it seems, the Treasury. We know that officials knew about it a year ago. We know that the Paymaster General was told about it six months ago. Yet nothing was done until recently to address the issue. I hope that the Committee will take up that issue, because millions and millions of pounds have been lost from the Exchequer through this fraud. We must know why appropriate action was not taken earlier.
	The Committee has addressed benefit fraud, and it is right to do so. VAT fraud stands at £11 billion, and we need to know from the Government what they are doing to address that.

Richard Bacon: On tax credits, we are familiar with the fact that the accounts of the European Union and the Department for Work and Pensions are qualified. But is it not a scandal, although less well known, that because of the problems with tax credits, the trust accounts of the Inland Revenue have been qualified by the Comptroller and Auditor General?

David Heath: I think that it is. Her Majesty's Revenue and Customs, as it now is, should be beyond reproach in this area. Because such fraud has been allowed to develop and devour public funds, however, that department has a serious problem. I want to be assured not only that the Committee is aware of that and examining it, but that the Government recognise that they have a serious problem, which needs to be addressed as a matter of urgency.
	The intervention of the hon. Member for South Norfolk (Mr. Bacon) brings me to my last point, which is on the Committee's opportune report on fraud in the European Union. How long have we talked about the potential for fraud within the European Union? How long has the European Commission simply sat on its hands rather than take the appropriate actions? We have the European fraud office, l'Office Européen de Lutte Anti-Fraude—OLAF—but there is no direct link between OLAF and national audit offices of the member states. There is no common methodology, or even, as has been mentioned, a common definition of what comprises fraud rather than irregularities. We need to get this right, and I echo the call for clarity from the Government as to exactly what they achieved during the UK presidency. If they did not achieve the necessary breakthrough in dealing effectively with fraud, I hope that they will pursue the issue as a member state through the next presidency and the presidency after that, and for as long as it takes to get to the point at which European Union accounts are no longer qualified because it is impossible to account for fraud.
	The issues that the Committee takes up on our behalf are enormously important for the country. We should not run away with the idea that all Government functions are in chaos and that mismanagement is the rule of the day. Where that does occur, however, it is important that we identify it, and even more importantly, that we address it, deal with it and improve in future.

Helen Goodman: I am sure that it will not surprise hon. Members to hear that I was rather a swot at school. I always remember listening to the radio and hearing about the all-powerful Public Accounts Committee, so I am particularly glad to take part in the debate. I want to offer some thoughts on the way in which the PAC works and on how we may improve what we do.
	I pay tribute to the great support that we have received from our Clerks, Nick Wright, Emma Sawyer and the other people in the office, and to Sir John Bourn and all the civil servants at the NAO.
	The evidence for all the reports on the list for the debate was taken before the general election. Some of them have been approved since the election but all the real work was done before the election. Obviously, that raises the question of how timely the work of the Committee is and what we could do to improve the timeliness of the work of the NAO and the Committee itself.

Sadiq Khan: Does my hon. Friend agree that, by the time the report of the PAC is eventually published, those who prepared the first NAO report and those who gave evidence have forgotten what the original grievances were?

Helen Goodman: I am sure that there is a lot in what my hon. Friend says, although since I have not yet been in that situation, I would not like to be too firm on the matter. However, I agree that there is that risk. When new Members arrived on the Committee, there seemed to be uncertainty about what we were approving. I raise the matter because it would be good if the Committee could do the work more speedily. Of course, we need to maintain the standards of the NAO reports and not put it under ridiculous pressure, but slightly shorter and quicker reports would improve its work.

Kitty Ussher: I agree with what my hon. Friend says and it mirrors my experience as a new Member. Does she agree that, when there is a big delay between the initial NAO report and the publication of our deliberations, often as much as six or nine months later, or even longer, in many cases, the problem that the NAO identified has already been fixed?

Helen Goodman: I am grateful to my hon. Friend for making that point. With regard to specific issues, what she says is true, but one of the most noticeable things is that there are recurrent themes in the reports. I want to refer to some of those, which the Committee has to look at repeatedly. That suggests that some work is intrinsically difficult for Government to do and we need to concentrate on improving Government's capability to do those things.
	First, Members have talked about the big IT programmes. The 25th report on congestion and the 27th report on IT projects dealt with those. The continuing and probably necessary reliance of all Governments, whatever their complexion, on large IT projects is a triumph of hope over experience.
	Secondly, another recurrent problem is the tendency for large capital projects to overrun, hence the difficulty in controlling their costs. A third problem, which comes out in the report on tax credits, the benefit system and asylum, is the great difficulty in running systems that of necessity are large and bureaucratic, because they deal with large case loads, and in personalising them to individuals. It is especially difficult to run such systems because, by definition, they are run by the state. They are not areas where choice and competition are possible, or even imaginable. The question is how to improve the efficiency of such systems. Another issue, which arises continually in the papers before us and in evidence from officials is the problematic interface between the public and private sectors, such as the shortages of key skills in the public sector and the question of salary relativities. Again that comes through in lots of areas.
	That said, there are many virtues in the way in which the Committee works. A key virtue is the specificity of the reports. It means that we avoid the rather generalised management discussion about outcomes, outputs and targets and look at what is happening in a particular case to particular people. I know that officials sometimes feel that we are rather harsh on them and that we use our constituency cases to back up a criticism. I suggest to officials who might read the record of this debate that senior officials get an over-rosy picture of how well systems are operating. When they visit local offices they are shown exactly what is going best, what is new and what is innovative. Somewhere between us lies what is really going on in the public services.
	There is the issue of the way the Committee works. Is it too confrontational? Does that reduce the quality of the information that we retrieve? Currently it is fashionable to decry Punch and Judy politics and to look for something more consensual. There is also the question of whether the arrival of more female members on the Committee will feminise the working and make it more consensual.

Kitty Ussher: Did my hon. Friend notice the comments of the newest member of the PAC in this week's The House Magazine when he said after his very first meeting that he feared he was far too nice for the Public Accounts Committee?

Helen Goodman: I had not noticed that. While I started off by believing that a consensual approach was appropriate, after only a few months I can already see that unless the Committee is tough on people giving evidence, there is vast scope for evasion. As a comfort to witnesses who may have to face the PAC, during the Christmas recess I had a recurring nightmare that I was being grilled by the PAC. I would wake at 3 am to the even more terrifying realisation that I was the one who was meant to be doing the grilling.
	That of course is related to the question of who takes responsibility for decisions when things go wrong. Colleagues who are long-standing members of the Committee have expressed frustration that it sometimes seems as if in Whitehall no one ever takes final responsibility. A mess is made and people are moved on. Being capable of giving an elegant defence is more important for the careers of officials than the reality of whether they are good at delivering. There is something that we need to address for that reason, and that is the advent of boards and non-executive directors in Whitehall, and their impact on accountability.
	Traditionally, Ministers are responsible for policy, and accounting officers, the permanent secretary of the Department, for the way the money is spent. A few weeks ago we attended a seminar in the Treasury. It was explained to us that Ministers retained responsibility for, for example, the content of the Budget, but that the boards would share responsibility for the way in which Departments are run. In a policy Department such as the Treasury or Foreign Office, that distinction makes sense, but in other Departments, such as the Department for Work and Pensions or Her Majesty's Revenue and Customs, where half the issue is the way in which individual civil servants are treating members of the public, that is not a realistic distinction. We need to look at this area, possibly in conjunction with the Public Administration Committee. Clearly there are overlaps between their responsibilities and ours for examining these structures.
	Finally, I want to say something about propriety, by which I mean, is public money being spent on the purpose for which it was voted? So few people will be listening to this debate that I shall risk a diplomatic incident by calling this the "Why we are not Italian" problem. There is a story—I am not sure whether it is apocryphal—concerning two cities in Italy. Two motorways connect them because different people in the Italian ministry of transport were on the take from different parts of the Mafia. We in this country do not traditionally suffer from such problems, and the 18th report on financial management is clearly relevant in this regard.
	However, maintaining high standards of propriety is very important to the state of our democracy. We must avoid corruption. Decisions must be transparent and those in public office must be accountable to the people who elect them for the decisions that are finally taken, and not to some other group. Of course, maintaining high standards is also important economically: it promotes efficient markets, rational choices and value for money. I fear that, once lost, the culture of the proper use of public money would be very hard to restore. We only have that culture because of the great work of our predecessors, particularly in the 19th century. We need to renew our focus on this issue.
	There is a proliferation of complex financing schemes such as private finance initiatives, public-private partnerships and local improvement finance trusts. I am not saying that such schemes are not useful in themselves in leveraging in more capital and new skills, but the risks associated with people moving rapidly between the public and private sectors—between being the customer, and being the person granting the contract—are clear. We would be foolish to close our eyes to this issue, as even the briefest look at the back of "Private Eye" every fortnight will tell us. I hope that we can address it in the forthcoming Session.

Richard Bacon: It is a great pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), who provided the House with a penetrating analysis of the Committee's work, and of some of the issues and problems with which it has to deal. I agree with a great deal of what she said. She certainly does not sound like a new member of the Committee, but of course, she was a Treasury official for a while. We also know—I am not sure that she knows that we know—that she was the original teenage scribbler. She has now been promoted from scribbling to offering penetrating analysis, and we welcome her and the other new members of the Committee to their positions.

Helen Goodman: I should point out that I was not a scribbler; I was the original teenage kid.

Richard Bacon: The hon. Lady was a deputy scribbler, perhaps.
	Like the hon. Lady, I want to pay tribute to Nick Wright, Chris Randall, Emma Sawyer and Ronnie Jefferson, who run the Committee's office; to the press office of the National Audit Office, which is headed by Barry Lester, with able support from Mark Strathdene and others; and to the office of Sir John Bourn himself. I should point out by way of correction that members of the NAO are not civil servants and that in fact, the Comptroller and Auditor General is an Officer of the House of Commons. That is of incalculable importance. Even if it is a constitutional nicety, it says something very important about the way in which the system is structured.
	I want to focus on private finance initiatives, particularly those relating to hospitals. The Committee has examined a wide range of PFI projects and a wide range of hospitals. We have looked at the Darent Valley hospital and the Dartford and Gravesham hospital. We visited the UCL hospitals and recently examined the Norfolk and Norwich hospital, which is in my own area. The issues associated with hospital procurement illustrate some important themes that merit further scrutiny and discussion not only by the Committee, but by the Treasury.
	We are all familiar with the standard PFI model as it has developed. It started out as a design, build, finance and operate model, whereby the Government said to operators, "Go off and do it, and tell us when you've done it." There have been many successes; indeed, not even critics of PFI would deny that an increasing number of buildings have been delivered on time and on budget, with substantially reduced, if not completely eliminated, cost overruns.
	The NAO's figures show that, in 2001, 76 per cent. of projects were delivered on time and 79 per cent. to budget. That compares with 30 per cent. on time and 27 per cent. to budget for conventional procurement. More recent Treasury figures tell an even better story, with 88 per cent. of projects delivered on time and 79 per cent. to budget.
	We all know examples of conventional procurements that have gone horribly wrong—the Jubilee line extension, the British Library, the Scottish Parliament building, and even Portcullis house. In the latter case, all kinds of problems were encountered. The wrong kind of bronze was used on the roof, and the windows cost £23 million more than they were supposed to. The president of the Royal Institute of British Architects told me recently that it would have been cheaper to clad the exterior of Portcullis house with 7-series BMWs. That shows the scale of the problems that conventional procurement can encounter, and that PFI has offered a successful alternative in many cases.
	There is no doubt that PFI has led to significant improvements, or that it is here to stay. The question is whether we are getting the best possible value from the way that PFI procurement is conducted. There is growing evidence that we are not, a conclusion that is especially well illustrated by PFI hospital procurement.
	Many of the problems have to do with design, and they could be avoided with more thought and a better assessment of requirements in the early phase of procurement. For example, the Cumberland infirmary in Carlisle was a 45-year contract costing £65 million. The contract called for a 474-bed hospital, but the new infirmary has a capacity of 444 beds. Floor capacity in the old sites that it replaced amounted to 57,000 sq ft, but the new site has only 42,000 sq ft. The infirmary has been criticised for having cheap components that need refitting at short intervals. The maintenance costs are 50 per cent. over projections, there is poor drainage and plumbing, and limited signage. Patients exiting cardiology have to go through five sets of swing doors, even though most of them are in wheelchairs.
	The new 450-bed district general hospital in Durham was built on the Dryburn site to rationalise services provided previously at Shotley Bridge and the old Dryburn hospital. There, the pathology lab flooded three times in the first 18 months, twice with raw sewage. There is poor ventilation and air filtration and the fixtures and fittings are of poor quality. Some of the lightweight storage cupboards are unable to take the weight of routine equipment.
	The opening of the hospital in Bishop Aukland, in the constituency of the hon. Member for Bishop Auckland, was delayed by two months for modifications. The generator and the core electrical systems had to be redesigned immediately after the hospital opened.
	The Norfolk and Norwich university hospital is on the border of my constituency. Most of my constituents go there for medical treatment, and many work there. The negative pressure rooms were not properly operational for two years. A nurse lifted ceiling tiles in third-floor ward areas and found air ducting lying in unconnected lengths. The job simply had not been finished. I am pleased to say that the hospital has since spent some money on modifying those rooms and they are fully operational, but other problems remain. For example, there is no ventilation in the kitchens: 30° C working conditions are common, and a temperature of 44° C has been recorded. In addition, delivery loading bays are inefficient, and there are numerous reports of health and safety problems due to layout and the poor materials used in construction.
	When it is published, the separate PAC report on refinancing will reveal some startling facts about the financial engineering used, not to increase the number of beds or to build a new wing, but solely to accelerate the rate of financial return, from 18 per cent. to over 60 per cent.
	The new Hereford hospital has 354 beds. The boiler house opened with no water treatment plant. There were materials defects, doors were too heavy for the opening restraints. Engineering workshops designed for five staff regularly have 13 people working in them, and three lifts had to be refitted within the first 12 months.
	I turn now to Worcestershire, a county for which I have a particular affection, as I had my appendix taken out in a hospital there some years ago. In the Worcestershire acute hospitals NHS trust's modern, 452-bed facility, the back office conditions are too cramped. Corridors are too narrow to pass two beds side by side. There is also an inefficient and unused one-way system.
	It is worth saying that these are not just snagging issues that occur with any new building. They are design problems. It is not normal to refit three lifts in the first 12 months. One does not redesign the generator and the core electrical systems immediately after opening a new hospital and call it snagging. Corridors that are too narrow to pass two beds side by side are not a snagging problem. A pathology lab that floods three times in 18 months, including with raw sewage, is not a snagging problem. They are fundamental signs of poor specification and design. The current PFI procurement process makes such design more likely, not less.
	As well as inadequate quality, we are also seeing spiralling costs. The average cost of bidding for a PFI hospital has risen from £7.5 million two years ago—itself an extraordinary figure—to more than £11.5 million now. RIBA believes that a conservative estimate of the cost of abortive bids is about £500 million per annum across the sector. As part of the company's operational profitability, that inevitably gets rolled into the cost of the losing consortium's next bid. Even the winning consortium is likely to have factored in the cost of its previous unsuccessful bids.
	The process is simply making the whole industry more expensive. It is also excluding many capable medium-sized contractors. In effect, it is a Government-sponsored oligopoly. It is wasteful. Parallel teams work up designs that require a considerable amount of professional time and skill at a time when, as the hon. Member for Bishop Auckland said, there is an acute skills shortage. It is worse than that, because the most expert clients are the ones who can recruit the best designers, who then compete with each other while the other bids have less experienced designers, leading to lower overall quality of design.
	Once a consortium has won, another key question arises that, in some ways, is even worse in terms of its consequences, namely, who, then, is the client? The client is not who one would think it would be. It is not the hospital trust; the designer's client is the consortium. So there will be pressures. A marked degradation has been seen on many occasions in the design quality after financial close.

Helen Goodman: Does the hon. Gentleman agree that part of the issue is not the overall cost but the point at which we are spending money on big projects? We are not spending it early enough. We are not investing early enough in skills within the public sector. Hence, we find ourselves spending more later on.

Richard Bacon: We find ourselves spending more later on in spades, and wastefully. In the recent exercise with St. Mary's, Paddington, the bidding round failed, cost £50 million and produced nothing of worth. They are having to go back and do it all again. We recently heard about the problems with Bart's, with potentially £100 million of fees lost.
	The hon. Lady anticipates a point that I intended to make later by drawing an analogy with the way in which defence procurement works. As we have said in some of our reports, the assessment phase should receive a greater proportion of the resource that goes into the project. Designers are having to respond to pressures from the leaders of consortiums, who are usually a combination of the building contractors and the banks, to build to the lowest cost or to facilitate the easiest building method. That may be sensible or it may be in the best interests not of the client but of the consortium that has to deliver it. The client is interested in the best possible hospital within the available budget for patients.
	The problems are so widespread that the Treasury cannot say that it is not a problem and neither can anyone else. It is a significant problem. The question is what do we do about it? RIBA, along with others, has evolved what it thinks may be part of the answer. It has called it smart procurement, which leads directly to the point that the hon. Member for Bishop Auckland was making. In smart acquisition, part of the emphasis is on spending more of the resource earlier.
	In our third report of the 2005–06 Session, HC410, we said in terms:
	"The amount of work undertaken in the assessment phase is still not sufficient to enable sensible investment decisions to be taken . The Department's own Smart Acquisition guideline suggests that up to 15 per cent. of the cost of a project should be spent in the assessment phase."
	That is for defence procurement. I do not want to promulgate a particular percentage, but it is clear that the point is analogous to what is going on in PFI hospitals.
	Essentially, it is about getting the design team much nearer to the client. I have talked to the institute and it does not appear to be a case of architects or other professionals talking up their own book, which might be expected from any professional body. That is not what the institute means. It means getting civil engineers, quantity surveyors and others to work closely with the relevant hospital trust at a much earlier stage to eliminate problems by having a much closer understanding much earlier of what is required. That effectively allows the client to drive the process more strongly, with greater information and control, and power over the outcome.
	In that context, it is interesting to consider the situation in Northern Ireland. As the Chairman said earlier, we have had many reasons to look at Northern Ireland, including the Navan centre, the sheep annual premium scheme and the recent Jobskills project. Many of the projects we have looked at have been a disgrace, but the Department for Health, Social Services and Public Safety, especially the Health Estates Agency under the management of John Cole, is blazing a trail. Because of the slightly different context in Northern Ireland, it has gone further down the path and I urge the Financial Secretary and other Ministers to examine what has been done there and whether the rest of the UK could learn some lessons about how PFI can be conducted.
	The issue is not only about designers: it is about the whole built environment sector coming together to produce better outcomes for taxpayers. The initiative that the institute has evolved is now at an advanced stage and preliminary discussions have already taken place with the Treasury. The institute has talked to public sector clients, building contractors, civil engineers, quantity surveyors, building surveyors, facilities managers, insurers and banks, and is looking to produce a final cross-industry position paper. My plea to the Financial Secretary is that the Treasury should engage with the process seriously. These are welcome moves by the industry to produce a better, more mature and more efficient PFI market. I urge the Financial Secretary to meet the main players who, in my view, are seeking genuinely to eliminate problems and produce better results to turn PFI into something that delivers even more value for taxpayers who are, after all, paying for it.

Sarah McCarthy-Fry: Like other hon. Members, I wish to pay tribute to the Committee administration. Nick Wright and his colleagues have been extraordinarily helpful to new members like me. Nothing is too much trouble for them, even if some of our questions at the beginning must have been very irksome to them. The hon. Member for Gainsborough (Mr. Leigh) has proved to be a most assiduous Chair, taking care to make new members feel welcome, and I thank him for that.
	The NAO have also provided an excellent service. I particularly welcomed the morning that new members spent with the NAO, which certainly gave me a greater understanding of the auditing process and how the team operates, and also admiration for the sheer volume of reports they produce. The briefing papers produced by the NAO are a valuable resource for hard-pressed MPs and serve as guidance on the best way to probe with our questions.
	As a new member, I approached my first meeting of the PAC with some trepidation, as I knew its fearsome reputation. I have to say I was not disappointed. The style of questioning proved to be as uncompromising as I had been told, but now I have a few sessions under my belt I can see why that should be so. Although I hope that I have never been rude or discourteous, I have sometimes been frustrated if I feel that the witnesses are evading the issues, or, more often, spinning out their answers because we are time limited. The object of the evidence sessions after all, is not for witnesses to escape unscathed, but to be called to account for how they are delivering value for money for my constituents and the constituents of every other Member in this House.

Edward Leigh: I just wanted to put on the record that since I have been running the Committee, we have tried to stop personal abuse of senior civil servants, which was a feature of the Committee before. I know that these debates are noted in Whitehall, so I wanted to say that while it is important to be robust, we are more polite than we were even five or 10 years ago.

Sarah McCarthy-Fry: I was not there 15 years ago, so I do not know what it was like then. Recently in The House Magazine, my hon. Friend the Member for Great Grimsby (Mr. Mitchell) likened the Committee, after his first meeting, to
	"Paxperson on speed, playing 'happy slapping'."
	I certainly do not recognise that description.
	I am delighted to have been appointed to the Public Accounts Committee because it gives me the opportunity to examine a wide variety of subjects—far more than if I served on a Select Committee that hones in on just one matter. I have learned since becoming a Member of the House that my constituents expect me to be an expert on absolutely everything and the Committee is an excellent training ground for that.
	I was taught during my accountancy training that value for money is the three E's: economy, because one does not pay £5 for something when it can be bought for £3; efficiency, which is when one gets the absolute best use from resources without wasting any of them; and effectiveness, which is delivery on all policy goals. The Public Accounts Committee drives at how value for money is achieved.
	Before I entered the House, I worked in the manufacturing industry in the private sector. Our objective was to deliver shareholder value in a competitive environment. The tools that we used over many years to deliver that were effective risk management and project management, which were raised by the hon. Member for Gainsborough—yet another example of cross-party consensus. If we get those two things right, we will have gone a long way towards ensuring that British taxpayers get the maximum bang for their buck and that high-quality public services are delivered to all who need them.
	We are short of time for the debate, so I shall focus on just two Committee reports. The 15th report of the 2004–05 Session, which has been mentioned already, was called "Managing risks to improve public services". Risk management has quite rightly risen high up the agenda of the delivery of public services because it enables resources to be prioritised to deliver the best outcomes to the majority of people. Risk management will never completely eradicate unpleasant surprises, but when it is used effectively, it can minimise them. It enables Government Departments to plan proactively, rather than just reacting.
	Government Departments now share delivery with a huge range of partners outside the traditional Government machinery, such as local authorities, charities, voluntary organisations and the private sector. The Government do not have direct control over how those organisations operate, so good risk management is essential if the partnerships are going to work effectively for the public. Many of those partner organisations work under service level agreements. It is vital that proper risk assessment is done at the start of the process so that all possible contingencies have been considered when the agreements are drawn up.
	The report showed that at the time at which it was written, there was some way to go before risk management would become embedded in the culture. In June 2004, only 10 per cent. of Departments considered that the process was fully embedded, although three quarters stated that it had been implemented in key areas. I was especially worried that the report showed that just 45 per cent. of Departments in the NAO survey said that they identified and assessed risks in policy making. That seems to be pretty fundamental because if they do not identify whether there is sufficient capability and expertise to implement a policy and measure that against a range of possible outcomes, they are not giving themselves a fair crack of the whip. They are then operating crisis management, not properly planned management.
	If risk management is not embedded in the culture, there is a risk that innovation will be stifled. We all realise that we have to examine new and innovative ways of delivering public services, especially if we want to target those services at hard-to-reach groups. However, we can do that only if we are aware of the risks involved in developing new ways of delivery and have robust processes to manage those risks. I would like us to tap into the undoubted talent of our Government employees to come up with innovative ideas, but before they will do that, they will need to feel that the Government have a positive attitude towards managed risk taking. I thus welcome the Treasury response that competence in risk management should be recognised in the context of the professional skills for Government programme. I am also encouraged by the agreement of the Treasury to the PAC conclusion that it has a key role of promoting continuous improvement in risk management and embedding risk management into spending reviews. I cannot emphasise enough the importance of embedding risk assessment and risk management at a sufficiently early stage—that point has already been raised—and I would hope that that is understood.
	Moving on to project management, the third report of the 2005–06 session has already been mentioned—the Ministry of Defence major projects report. Having been involved in two major complex projects in my former business life, I know only too well the importance of effective project management. Risk management is linked to that. How well one has planned for contingencies is usually an indicator of how effective one's project management is, particularly on complex projects with many dependencies.
	Breaking the project down into manageable units with clearly defined tasks and clearly defined ownership for those tasks before the project starts is vital. Setting realistic time scales for tasks and getting the balance right between realistic time scales and adequate contingency is also vital. The project leader must be accountable and must have sufficient authority and leadership to keep on top of the project, motivate the team, avoid a blame culture, encourage innovation and keep the project on track.
	In project management, as in risk management, work put in at the early stages pays huge dividends. I echo the point made by the hon. Member for South Norfolk (Mr. Bacon), who has left the Chamber. The PAC's conclusion in the major projects report was that the amount of work undertaken in the assessment phase was still not sufficient to enable sensible investment decisions to be taken, particularly where the guidance stated that up to 15 per cent. should be spent on assessment, particularly of complex projects. The onus should be on those approving investment in large complex projects to ensure that sufficient time and resource has been spent on the planning phase.
	I note the Treasury response that the effectiveness of the assessment phase cannot be judged by the amount of time spent in that phase. Of course the amount spent may not have been spent wisely, but it is an indicator, and one that should carry a great deal of weight. As a former financial controller myself, I can only congratulate the PAC on its recommendation that financial controllers should always be part of the main project team. In my experience, the presence of the person controlling the purse strings is a very effective deterrent to allowing the costs to overrun as the first resort, rather than as the last resort, after every other alternative has been explored.
	The Treasury has acknowledged that there is a shortfall in project management skills and key leadership competences, and has proposed a review of the leadership development scheme to counter this. However, speed is of the essence, given the large sums of money being spent. The proposed completion of the review in April 2006, following which there will be an ongoing programme of improvements, is too slow. It means that we have already missed the boat on a number of projects.
	There is a further report on major Ministry of Defence projects to the PAC next week and I await with interest our interrogation of witnesses to see whether they think improvements have been made in risk management and project management, the two key factors that I and other hon. Members have identified in delivering value for money, not just in the MOD, but across all aspects of Government.

Greg Clark: Thank you very much, Mr. Deputy Speaker. I am grateful to have caught your eye. Like the hon. Member for Portsmouth, North (Sarah McCarthy-Fry), I am thrilled to be a member of the Public Accounts Committee. It is the best possible training to see not only how parliamentary Committees work, but how Whitehall works, and I am grateful to have that opportunity.
	Like previous speakers, I pay tribute to the work of the Committee secretariat, to the National Audit Office and to the chairmanship of my hon. Friend the Member for Gainsborough (Mr. Leigh). Like the hon. Member for Portsmouth, North, I found that attending my first sitting of the PAC rather took my breath away, with the ferocity of the questioning, but we have got into our stride and started to give as good as we get.
	It is important that we question witnesses robustly. One of the things that I have noticed during the hearings that we have had so far is that increasingly, there are organisations that are neither directly accountable to the electorate nor subject to the rigours of the marketplace, so it falls to us as the Public Accounts Committee to be almost the only possible scrutineers of their performance. That is not a happy situation. A class of organisations is developing that are neither part of the accountable public sector, nor subject to market disciplines. They are part of a kind of para-state that it is particularly difficult to interrogate. I refer to three examples.
	The first example causes me frustration because it was the subject of one of our hearings and has been covered in the reports before us: Her Majesty's Revenue and Customs. In a hearing on the complexity of benefits and tax credits, we considered a recent change in policy—the increase in the earnings disregard for tax credits from £2,500 to £25,000. Clearly, such a step change has a cost attached to it, and it strikes me that part of our core remit in assessing the value for money of Government policy is to find out what those costs are.
	The transcript of the evidence reads like an episode of "Yes, Minister". It took about 19 questions to solicit from the officials responsible whether any estimate had been made of the cost of the change. It turned out that there was an estimate. Of course there was; any increase in a disregard from £2,500 to £25,000 is clearly a major policy decision and Revenue and Customs had assessed it. An undertaking was given that not necessarily a robust estimate but the one that was made in assessing the policy would be disclosed to the Committee. I waited for that disclosure to be made, and I waited and I waited, and I continue to wait.
	I tried the route of parliamentary questions. I tabled a question before Christmas for answer on 20 December, but no answer came from the Treasury. There was neither a Christmas card nor any form of greeting from the Chancellor. I asked for the estimate that had been made when the policy was being assessed, but the answer that was finally given on 10 January was entirely unsatisfactory and diversionary:
	"Precise estimates of the change in entitlement resulting from the higher disregard . . . will not be known until 2006–07 awards have been finalised in early 2008."—[Official Report, 10 January 2006; Vol. 441, c. 556W.]
	The PAC gives us our one and only opportunity to ask questions of officials who are not directly accountable in any other forum, so it is particularly important. It is therefore disappointing that such an important Committee does not have quite the set of teeth that we need. Parliament's role of scrutinising the Government is very important and should be treated with respect. To exclude from scrutiny by the Committee and therefore the House such a major area of Government spending is not in accordance with the principles on which the PAC was established all those years ago.
	The second area is the national health service. In this arena of para-state organisations, where accountability is difficult to exercise, we have different parts of the NHS going by different names. We have primary care trusts, strategic health authorities and trusts, but they are all part of the NHS. We should have one NHS and that should be accountable. Indeed, it is important to getting value for money that it is accountable. By way of illustration, in my constituency operations and out-patient appointments are no longer being allocated or offered to those who need them, but the identity of who can be held responsible for that is obscure.

Helen Goodman: The hon. Gentleman's point is interesting but issues concerning the hospital in his constituency prove the exact opposite. It is because hospitals are accountable and because there are limits on the amount of money that they can spend that such management action has been taken—albeit with the unfortunate consequences to which he refers.

Greg Clark: Let me describe those consequences. As the hon. Lady knows, we are a value-for-money Committee: we scrutinise the value for money of public expenditure. What is going on in my hospital trust is illustrative of a national problem and of exactly the kind of problem that our Committee is here to interrogate. The problem is that the primary care trusts are running out of money. The financial year end is on 31 March and the PCTs are telling the hospital trusts that they will not finance any more out-patient or in-patient procedures in this financial year.
	Let me explain the consequences of that in value-for-money terms. Hospital consultants and surgeons continue to be employed by the trust and to have their salaries paid. The operating theatres remain open and available, but they are not used. Patients are waiting to be treated, yet consultants and surgeons are being told to go off and play golf, read the newspaper or twiddle their thumbs, on full pay, because they are not allowed to trigger a charge—which is, after all, just a mark on an electronic ledger—this side of 31 March.
	None of us would doubt that the patients need to be treated. People need to have their hip operations, for example, and they will have to be carried out at some point. However, because of this arbitrary deadline, capacity that is available now is not being used, but it will have to be used in the next financial year, and shared with the patients who come on to the lists in that year. Who knows, perhaps that will give rise to overtime payments or to capacity constraints. This is clearly not offering value for money.
	I have spoken to the executives in these organisations, and I feel for them. It is very difficult to know what to advise them to do. The trust is merely following the inevitable consequence of the PCT's decision not to fund any further procedures. The PCTs are under apparently irrevocable instructions not to make funds available if there has been more activity during the year. Whoever is responsible, the consequence is a loss of value for money.
	There are solutions available, however. One possibility is that, if a PCT and a hospital trust have had their allocation of activity for one year, any further activity could be charged at marginal cost, rather than the full tariff. After all, the only costs that would be incurred in carrying out these operations would be the cost of lighting the operating theatre and of any consumables used during the operation. That is one example, but who would take responsibility for making such a decision? Not the Secretary of State. She would say that these matters are now devolved to the PCTs and the hospital trusts. Yet the PCTs and the trusts have no locus to be able to take decisions that would remedy the problem. So we have a situation that, in economic and value-for-money terms, is completely mad.
	This is an example of the lack of accountability that is fundamental to the system, and our Committee has an important role in scrutinising such issues. I just wish that the powers of the Committee extended perhaps not to the ability to interrogate Ministers, but to the ability to cause Ministers to take responsibility for some of the consequences of their policy actions.
	My final observation is on the Office of Fair Trading. This is a body that is only very indirectly accountable to Parliament, but it nevertheless exists to enact the will of Parliament as expressed in, among other things, the Competition Act 1998.

Edward Leigh: I thank my hon. Friend for giving way. I just want to put it on the record, in regard to the point made about tax disregards, that the Comptroller and Auditor General has full access powers and I have asked him to go in and get the relevant information himself if it is not forthcoming. He can go into the Treasury and get it.

Greg Clark: This is a useful power, but there is a disappointing aspect. We know that the information is available; it merely needs to be disclosed to us, and the idea that it may not be is worrying. Perhaps the Financial Secretary will tell us that he can remedy the problem.
	The Office of Fair Trading was equipped with vigorous powers to promote competition, which are crucial to the economy, but its performance seems quite lax. Powers such as the power to compel evidence and the power to fine miscreants up to 10 per cent. of their turnover are not being used, and seem not to be used at the discretion of the officials responsible. Ministers are not responsible for the decisions, and it is difficult for anyone other than the PAC to exercise any leverage on whether the OFT is implementing the will of Parliament, which it was set up to do.
	Our Committee has a crucial role, and as more organisations that are not directly accountable either to customers or to Parliament are established, its role will become even more important; but we should not kid ourselves that our present powers are more effective than they are. We have power to expose poor practice, and to commend good practice where we find it. I hope that, if we take the suggested route, a new culture will develop. I hope that, as our findings and the recommendations of the National Audit Office present a unique opportunity for scrutiny, they will be taken particularly seriously. That is important to the efficiency and performance of the public sector.

Kitty Ussher: It is a pleasure to follow the hon. Member for Tunbridge Wells (Greg Clark). He has a consistently rigorous and persistent line of questioning in our Committee, which has proved extremely effective.
	My hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) spoke of the need to control risk. Some might say that I flatter the hon. Member for Tunbridge Wells simply because he represents my parents-in-law in the beautiful village of Goudhurst. I am not sure what form the risk to me might take if I got on the wrong side of him, but I am sure that it would be substantial. Nevertheless, I assure him that my flattery is sincere. It is a pleasure to serve alongside him.
	Many Members, notably the hon. Members for Somerton and Frome (Mr. Heath) and for South Norfolk (Mr. Bacon), discussed smart procurement and the need for Government to procure effectively. I assure them that help is at hand in the form of my ten-minute Bill. I hope that I may use this opportunity to advertise it, Mr. Deputy Speaker. It seeks to enshrine in law the requirement for Departments to procure 2.5 per cent. of their research budgets from smaller companies, thereby harnessing the best scientific brains to find new and innovative solutions to public procurement and policy questions. I am sure that that is what we in the PAC aspire to do.

Richard Bacon: I am fascinated to learn that the hon. Lady is to present a ten-minute Bill. Might she find time during her 10 minutes to discuss the Clinger-Cohen Acts in the United States, which compel Government agencies there to publish in a statutory framework the gateways during the procurement of IT projects? Such a requirement would be very welcome in this country.

Mr. Deputy Speaker: Order. I do not think that on this occasion we should expose what might be the substance of the speech of the hon. Member for Burnley (Kitty Ussher) when her Bill is presented. I think that we should stick to the agenda before us.

Kitty Ussher: I will, of course, follow your advice, Mr. Deputy Speaker, and not ruin the suspense for—I am sure—many Members. I shall be making my speech the week after next.
	Let me add my tribute to Sir John Bourn and all the staff at the National Audit Office, to the rigorous nature of their reports and to the support that they give our Committee, which is such an important part of our democratic structure. I also pay tribute to our Clerk, Nick, and his team, who have been so patient in explaining the Committee's procedures to new members like me. The same applies very much to the Chair, the hon. Member for Gainsborough (Mr. Leigh), and to the senior Labour Committee members—as well as the Conservative members—who have courteously taken the trouble to advise me on the way in which the Committee works and how to get the most out of it.
	It is initially daunting to find oneself on a Committee that considers two new subjects each and every week—a far cry from the more traditional Select Committees, which shadow Departments and have the leisure of deciding on their own subjects and investigating them forensically and in depth over weeks or months. For us, the hard work and the forensic work are done by the National Audit Office. We are the mechanism through which it airs its work. Through it, we are able to hold Departments to account.
	As a cross-party representative grouping of unwhipped Back Benchers, we are, I guess, the voice of the people, taking the evidence presented through the forensic skills of the NAO and asking the questions on behalf of ordinary British taxpayers, namely, are we getting value for money from the taxes we pay and, to use the phrase used by my hon. Friend the Member for Portsmouth, North, are we getting enough bang for our buck?
	On the whole, I have been fairly impressed by the answers that we get. The Chairman of the Committee referred to our December report, which considered the cumulative conclusions to be drawn from the last 10 years of our Committee's work. He rightly explained the number of recommendations that we have been making, but the first paragraph of that report makes it crystal clear that Governments over the years have acted on most of our recommendations and in doing so have, in many cases, secured financial savings, improved the standard of public services and tackled the risks to successful delivery.
	Most striking is the effect of the Gershon review, which in 2004 made recommendations that would deliver £20 billion of savings through better organisation and smarter procurement, and would release more resources for front-line public services. I know from my experience in a previous life as one of those dreaded special advisers the fear that would run through Departments at the thought of being hauled in front of the Public Accounts Committee. Accounting officers really feel the potential pressure of that, which is a good thing because it means that they will perform their duty more effectively.
	I want to pick out an example in relation to a report that falls within the scope of the motion. It is extremely important and perhaps merits further work, and it follows the line of comment of my hon. Friend the Member for Dagenham (Jon Cruddas) in that it considers the spatial effect of Government policy. It is the 51st report, 2003–04 Session, which considers success in the regions, the impact of the Government's regional policy and, specifically, the operation of the regional development agencies, as well as the contribution that they could make to the success of Government policy throughout the country.
	In 2004, when I was not a member, the Committee concluded:
	"Current RDA targets concentrate too much on short-term contributions to Whitehall objectives and too little on longer-term regional economic impact."
	That was true at that time. There was a tendency for all Departments, when wondering how to implement their policies, to instruct the RDAs—certainly in the English regions—to implement an aspect of Government policy, with the result that the RDAs had myriad targets and no real mechanism to prioritise them. Our conclusions were accepted by the Government, which is one reason for them seeking to align RDA strategies more closely with their economic policies and plans, as well as the relevant public service agreement targets.
	The Committee also recommended that the Department of Trade and Industry should measure the impact of the RDAs on regional economic performance—the growth and prosperity in each region—by means of improved data. The Government accepted that recommendation and, as a result, their statistical service will, in each region, publish regional data by March 2007. Those will be completely delivered by 2009, which sounds a long way off, but unless we understand exactly what is happening in each region we will not be able to get the policies right to deliver in that area. Adding up the effect in every region means considering the transformation of the entirety of England.
	If our aim as a Government is to extend opportunity across the country, regardless of which town we happen to call home, understanding the levers that have an effect on each part of the economy is crucial. As powers and budgets are devolved to the RDAs, their ability to impact on regional and sub-regional economies is increased, but without the ability to monitor the effect there will be a danger of public money being misused. That is what we are trying to avoid.
	The Government have a high-level PSA target to reduce the disparity of growth rates between regions, a stretching target and one that the Committee should revisit. I thank the NAO for agreeing to do some analytical work leading, I hope, to a report later this year on the effectiveness of the Government's policies in this area.
	Our Committee can make a large contribution to the economic theme. Recently the Treasury has made progress in extending our understanding, as a nation, of the levers of economic growth. It is not to make a party political point to say that now that unemployment is low, to raise GDP we need to focus on productivity—the amount of wealth produced for each person in work. It is a dry economic word and one cannot just affect it by waving a wand. The effect of the Treasury's work has been to make us realise what we do need to wave to get the growth that we all want. We need to ensure competitive markets, raise skill levels, increase investment and so on. There are officially five drivers of productivity.
	If that is our high-level objective, the next question is whether taxpayers' money spent in this area has the desired results. It is a difficult question, but we need to focus on it. It is difficult because it is notoriously hard to make a link between the micro and the macro; how can one create a link between the amount of taxpayers' money spent on these various economic levels and the actual eventual outcome in terms of macroeconomic indicators, productivity and ultimately GDP?
	Without an attempt to quantify the links, there is a danger that millions, or billions, of pounds of taxpayers' money can be spent without having the effect on the economy that all of us want. I hope that other members of the Committee agree that we need to return to this question and that there are questions that we need to continue to ask, be it on competition, agencies—we had such an opportunity recently—the DFES and its work in raising productivity through the skills agenda, or the DTI, and specifically business links, and its policies to raise entrepreneurship.
	To sum up, it is a pleasure to be on the Committee. I thank all those who have helped me to climb my learning curve in an attempt to serve on the Committee to greater effect. I hope that, through our work, we shall be able to play a part in not only securing greater value for money, but raising the level of growth in our country.

Maria Miller: Before I contribute to this important debate, I wish to bring to the attention of the House that a long-standing member of the Public Accounts Committee, my hon. Friend the Member for South Norfolk (Mr. Bacon), has an important engagement on Saturday: to marry his fiancée Victoria. I would like to wish him every happiness.
	The role of the PAC in holding the Government to account and recommending improvements to public services is truly unique and the ability of the Committee to put a spotlight on critical and topical issues is vital in the parliamentary process. We have heard a good deal about that today, but I wish to take it a bit further.
	In many ways, I urge the Government to view the PAC as their own in-house management consultancy, something for which many outside organisations pay vast sums of money. Perhaps the Government already view the Committee in that way, which is why, as with management consultancies, many of the points that the Committee makes are not listened to as carefully as they should be.
	My hon. Friend the Member for Gainsborough (Mr. Leigh) has said that over 90 per cent. of the recommendations made by the Committee are accepted. I would like to look at some of those that need to be put into action. My hon. Friend has said that the Committee does not take issue with the Government as to whether increases in expenditure are right; rather its remit is concerned with ensuring that massive increases in public expenditure actually count and are translated into a clear improvement in front-line services. We have heard as much today.
	A number of the reports produced by the PAC undertake that task, and none more so than the report on early years and child care published in June 2004. In that report, the PAC considered in detail the Government's child care policies and strategy at that time. Government expenditure on child care is set to increase by 24 per cent. in the next three years, as the Secretary of State reminded us only too recently in the debate on the Childcare Bill. Over the past eight years, Government expenditure on child care has been £17 billion. The report highlighted that the Government need to tackle the problem of the long-term viability of the expansion of child care provision that they have funded. Significant increases in investment are planned into the future, and the Committee rightly concluded that it is vital to ensure that that money is spent effectively.
	Provision of child care plays an important part in both the social and economic future of our country. Affordable and flexible child care is one of the most important concerns for many families. It is only right that the Government should consider how more families can use good-value, good-quality child care. Two thirds of women who have children are in work, and half of all women who have children under the age of five are in work. The trend is for more mothers to be in work. We need robust policies on that, and it is of paramount importance to ensure that our child care strategy is viable in the long term.
	The evidence taken by the PAC in its report highlighted that for every two new child care places opened in the past four years, one child care place has closed. In particular, closures of child minding places have increased significantly. When only 10 per cent. of the work force works from 9 to 5, however, child minding can often be the only source of child care that meets parents' needs. The Equal Opportunities Commission gave evidence to the PAC that highlighted stark uncertainties in the future for many of the new child care organisations operating in many parts of the country. It cited that 25 per cent. of all out-of-school clubs are making a loss, spiralling to two out of every three in more disadvantaged areas. That is not sustainable in the long term. That causes me concern, and from reading the report, it clearly concerns the PAC, too. The Committee also reviewed the National Audit Office report on child care, which shows that half the organisations that I have been talking about have made no plans to identify new funding streams for when their time-limited funding streams come to an end. That must be a cause of real concern.
	While the Government have agreed with the PAC's findings and conclusion that more needs to be done to help to ensure the long-term viability of our child care, they have not done as much as they might to take those critical findings into account in practice. The Committee took important and informative evidence from the Sure Start unit and the Department for Education and Skills, which clearly stated that to be viable in the long term, child care organisations needed to operate at 80 per cent. occupancy rates—80 per cent. of all places filled with children. That would give them an opportunity to break even, and provide a sustainable future for our child care providers. I know from visiting child care providers in my constituency that that is a fair figure. In each year since the Committee's report was issued, however, the average occupancy rates for child care providers have fallen. That makes it increasingly difficult for providers to break even and to continue to offer those critical services in our communities.
	Reports commissioned by Laing and Buisson show clearly that in January 2004 average occupancy rates in nurseries in the UK were 85 per cent. In January 2005, that had slipped to 83 per cent., and most recently, the same organisation found that in October 2005 the average occupancy rate in our nurseries had slipped below the magic figure of 80 per cent. to 76 per cent. As I have said, that level is cited by Sure Start as being below that which creates financial viability for those organisations.
	It is to be welcomed that child care in the UK has expanded. When I had to go into the marketplace after having my first child, I had enormous problems in accessing affordable child care. That problem continues to concern me and many of my constituents. However, we must look at the reality of the situation. The sector remains in a very difficult position. There is much uncertainty. Why are more of the new places not being taken up? Is it that they are not the places that people want? Is it the high cost? The cost of child care provision in this country remains among the highest in Europe. Much of the Government's strategy does not take into account the importance of informal, family-based child care, which makes up a large percentage of existing child care provision in the UK. Perhaps more needs to be done to examine that and to unpick why we are in a position that causes concern.
	One thing that working families need is certainty about their child care support. I am sure that many hon. Members will know from first hand experience that that is vital. Whatever system is put forward, it has to have at its heart the ability to sustain provision in the long term. I endorse that conclusion in the PAC report. It is not desirable for parents or families to be uncertain about the future provision of child care. Whether it is a child minder, nursery or after-school club, parents need to be able to plan their lives and those of their children in the knowledge that it is good-quality child care provision.
	My hon. Friend the Member for Gainsborough (Mr. Leigh) observed that the PAC's work is to ensure that massive increases in public expenditure actually count. In the child care sector, it is clear from the Committee's review of the facts, which was apolitical, as the Committee stressed, that the Government need to do more to review the action that is being taken. There are exciting plans under the Childcare Bill for children centres in every community. It is an enormous investment. There is a strong argument for some caution because quite large and fundamental concerns remain about the long-term viability of the Government's approach. When the market is still struggling to accommodate the Government's approach to funding, it is time for caution. Working better with existing child care providers has to be at the heart of our child care strategy. We need every pound invested to work hard to provide long-term solutions that count and give parents the certainty that I have talked about. The evidence in the PAC report suggests that a sizeable proportion of the provision is hanging on by its fingernails.
	The Government need not just to listen and to accept the Committee's reports, as we heard earlier, but to do something about those findings and about the concerns that have been raised. The Childcare Bill is proceeding through the parliamentary process. Many of the points that I have made today were raised by other hon. Friends in debates. It is an important issue. A key element of the Bill is the new duty on local authorities to take steps to provide sufficient child care provision. That is an expansion of their responsibility in the sector at a particularly difficult time. Can we continue to allow one child care place to be lost for every two created? Existing providers must be able to plan for the future and the long-term financial success of their organisations. The continuing fall in occupancy rates perhaps hints that we have not got to the root of the problem of child care provision in terms of cost and the role of other family arrangements.
	Some of those shortcomings could be helped by local government playing more of a role in determining child care. I acknowledge that. After all, it is much better placed to understand its communities. However, to reiterate the PAC's point about sustainability of provision, how sustainable is the role of local government in child care, given the fact that the Government will not provide any additional funding for that new and pivotal duty?
	I applaud the work of the PAC in holding the Government to account and applaud the PAC's objective of ensuring that public expenditure counts. However, I call on the Government to do more than just accept the Committee's work and to take this opportunity to use the expertise of this group of people to improve all our services for the good of our community.

Theresa Villiers: I am delighted that my first speech at the Dispatch Box concerns the hugely valuable work of the Public Accounts Committee. For well over 100 years it has been keeping a watchful eye on the activities of the Government and the way in which they spend the money of British citizens.
	In the period of the Committee's work that we are considering today, it has continued its long tradition of producing hard-hitting reports, which I believe have had a significant impact on the work of the Government and the way in which they carry forward their policies. There can be few more important tasks for a parliamentarian than to scrutinise the spending of taxpayers' money. I pay tribute to all the members of the Committee and its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh), for carrying out their watchdog role in such an effective and dedicated manner. I should also like to join others in paying tribute to the staff of the Committee and to Sir John Bourn and his staff at the National Audit Office for their detailed, dispassionate and tireless work in this area.
	My hon. Friend made, as one would expect, a wide-ranging speech on the work of the Committee over the past 18 months, the themes of which I will return to in my speech. The hon. Member for Dagenham (Jon Cruddas) talked in depth about population growth issues in his constituency and statistical analysis of demography, and its impact on social cohesion and infrastructure provision in his area. The hon. Member for Somerton and Frome (Mr. Heath) chose three themes: mismanagement, referring to IT disasters, which cropped up several times during the debate, misguided application of policy, in particular the Qinetiq project, and fraud and the crisis in the tax credit system. The hon. Member for Bishop Auckland (Helen Goodman) spoke of improving the methods of the PAC and expressed concerns about some of the IT programmes that the Committee had looked at, describing them with accuracy as often a triumph of hope over experience. My hon. Friend the Member for South Norfolk (Mr. Bacon) gave us an in depth account of what can go wrong with private finance initiatives and hospital provision. The hon. Member for Portsmouth, North (Sarah McCarthy-Fry) informed us that applying accountancy skills and effective project management could have a tremendous benefit if applied more widely in public procurement matters. My hon. Friend the Member for Tunbridge Wells (Greg Clark) emphasised the importance of robust bodies not accountable to the public or the marketplace, and spoke in rather frightening terms of a para-state which is difficult to interrogate properly. The hon. Member for Burnley (Kitty Ussher) referred to smart procurement and paid generous tributes to her colleagues on the Committee. I agree with her that in many ways the PAC is the voice of the people in keeping track of their money. Finally, my hon. Friend the Member for Basingstoke (Mrs. Miller) spoke with great insight into and information about child care problems and the PAC report on early years.
	Given the Committee's vast output and the late hour I cannot hope to cover all the reports. Instead I shall focus on a few of the more striking conclusions. Also I shall look to the lessons for the future. I should like to take this opportunity to point out how it would be useful to those embarking on preparations for the London Olympics to read some of the reports that we are discussing. That would help them avoid many of the mistakes that have characterised Olympic projects in the past. My constituents in Chipping Barnet are among the council tax payers expected to pick up the bill for the 2012 games. It is my fervent hope that the Government and the various organisations preparing for the Olympics follow the wise advice of the PAC in effective planning and project management. Let us hope that in a few years' time we are not standing here discussing a coruscating PAC critique of overspend on the 2012 games.
	As we have heard this afternoon, much of the work of the PAC focuses on achieving value for money in the public services. As the Chairman pointed out, there can be few issues more central to modern political discourse than this one. The sums at stake are huge. The Comptroller and Auditor General has calculated that a mere 1 per cent. efficiency improvement in the spending allocated to Departments over three years could release £14.5 billion to redeploy on front-line services. I find it difficult to believe that the Government's Gershon review or the Opposition's James report would have been initiated without the trailblazing work of the PAC; nor might we have seen the creation of the Government's departmental capability reviews without the PAC's bringing pressure to bear on achieving value for money for the taxpayer.
	Although some of the issues addressed by the PAC are complex in the extreme, much of its advice is a matter of simple good housekeeping and sensible project management. Time and again, it has emphasised the importance of carrying out an effective and thorough planning process—a theme mentioned already today—including an in-depth assessment of potential risks and problems; of ensuring that all timetables are realistic; of breaking down complex projects into smaller, more manageable components; of putting in place reliable back-up plans to maintain services in the event of problems; of retaining a strong management grip on all projects at all times; and above all, of acting commercially when procuring services from the private sector, and applying hard-headed commercial common sense to contract negotiations. I am sure that Members in all parts of the House will regretfully agree that the reports that we are discussing today demonstrate that the PAC's message has yet to percolate widely throughout Whitehall. Good practice in one Department too often fails to spread across to others. Examples still abound of projects on which taxpayers' money is wasted because of poor planning, and of lessons from past failures not being learned.
	The PAC's report on Operation Telic identified worrying mismanagement that exposed troops in Iraq to increased risk as a result of inadequate supply of important equipment. We heard this afternoon about the notorious case of the Ministry of Defence's purchasing eight Chinook HC3 helicopters for some £250 million, only to find that they were unusable. The report described this as
	"one of the worst examples of equipment acquisition that the Committee has seen".
	In its report on asylum decisions, the National Audit Office estimated that up to £500 million could have been saved if the Home Office had been able to put in place sufficient staff and infrastructure to meet the significant rise in asylum applications in 1999 and 2000. Sadly, we are all too well aware that a recurring theme in the PAC's deliberations is IT projects that go horribly wrong. In the most recent of many reports on this issue, the PAC expressed concern that the systems set up by the Government to prevent procurement disasters, such as the gateway review process, are too often overridden. A case study in how such projects can go wrong is set out in the PAC's damning report on the Criminal Records Bureau, and in its report on the transfer of GCHQ computers. The cost of that transfer was initially estimated at some £41 million; it eventually rose to nearer £450 million.

Richard Bacon: I had a conversation with the former Minister—I shall not embarrass him by naming him—who was responsible for the decision to go ahead with the Criminal Records Bureau project. He told me that he sat in a room with 12 people, read the relevant information, said, "This isn't going to work, is it?", and twelve voices replied, "Yes, Minister." Does that example not indicate the lack of independent advice available to Ministers on these complex projects?

Theresa Villiers: I agree, and my hon. Friend makes the point very well. It is particularly important that Government Departments heed the PAC's advice to act commercially and ensure that they look at a wide range of providers. One problem with IT procurement is that only a very few firms are competing for large Government contracts.
	Another theme returned to time and again by the PAC, and which was referred to by its Chairman today, is the disadvantage arising from complexity in the provision of public services. As well as being more expensive to run, the more complex the process is, the more likely it is that mistakes will be made. The PAC has estimated that rectifying errors costs the Department for Work and Pensions £1 billion every year. But looking at the financial cost of rectifying errors is to understate the human cost in terms of frustration and upset. All Members see that frustration daily in our constituency postbags.
	A recent and disturbing example of the problem was explored by the Committee's report on tax credits. It states that the complexity of the tax credits system is one of the major causes of the problems that we have witnessed over the past few months. Complexity means that customers and officials find it hard to understand the system, which increases the number of mistakes that they make. It also makes it more difficult to rectify the mistakes once they are made, and increases the opportunity for fraud—a point made by the hon. Member for Somerton and Frome (Mr. Heath).
	Recent developments have shown just how serious the problem is, with the Government forced to shut down their on-line applications systems because of large-scale identity fraud involving the names of thousands of workers at the Department for Work and Pensions and Network Rail.
	The Committee also noted that the way that the system was structured contributed to significant problems even where no mistakes were made. The system of provisional awards routinely overpays customers—a major factor in the crisis that means that many of the very poorest families are suddenly subject to demands to repay large sums of money. As a result, MPs and citizens advice bureaux have been inundated with distressing complaints from people forced to take desperate measures to repay the money that they owe. That very disturbing example provides a graphic illustration of how the work of the PAC goes beyond dry matters of Government spending and statistics and touches on real lives and hardship.
	Further examples of how complexity can hinder the efficient provision of public services were highlighted in the Committee's report on regional policy. For example, it found that, in the Thames Gateway area, a multiplicity of different organisations were responsible for regeneration. The Committee wisely advised that the Government should have a presumption against establishing new institutions and new tiers of bureaucracy unless it was clear that policy objectives could not be achieved through existing bodies.
	The Committee also noted the severe difficulties faced by organisations in the regions that have to grapple with many different funding streams—in the south-east, there are no fewer than 40 such streams. Much of that complexity results from the complexity of EU schemes, which brings me to another PAC report on the EU budget.
	The House is well aware that, for the past decade, the EU's own auditors have refused to sign off on their accounts—a shocking fact when compared with the exemplary standards of scrutiny demonstrated in the UK by the NAO and PAC. However, one of the biggest roadblocks to cleaning up the EU's accounts is the complexity of its agricultural support and regional aid programmes, which gives rise to high levels of fraud, error and maladministration. Only when the EU heeds the advice of the PAC and many other bodies and radically streamlines and simplifies its regional aid and agriculture programmes will there be any real hope that, one day, we will be able to ensure that every euro of the EU budget is properly accounted for.
	Another telling example of where complexity and bureaucracy get in the way of the efficient delivery of public services is revealed by the Committee's work on transport. When it looked at rail services, it established that the process for introducing new trains involved no fewer than 60 key stages. From my own constituency work, I know how difficult it can sometimes be to get things done on our rail network. It took many years of campaigning to get one of my local stations renovated. On the day that it was formally reopened, a cast of thousands from all the multiple different organisations that had to be involved in the project was in attendance.
	I hope that Government, Opposition and all those working in the rail industry can strive to put in place some of the Committee's recommendations for streamlining and simplifying how we run this crucial part of our transport infrastructure. I am sure that we would all agree that an efficient public transport network is vital for our international competitiveness and for the quality of life of our constituents.
	The Committee also had invaluable advice in relation to the public-private partnership for the London Underground. It expressed concern at the complexity of the structures put in place to operate the tube, and of the process by which PPP contracts were concluded. The deal took five years to conclude and transaction and consultancy costs soared to a staggering £455 million. The resulting contracts are opaque and difficult to understand. Many of my constituents complain to me almost daily of the dire performance of the Northern line, but the complexity of the PPP structures makes it very difficult to hold those responsible for the tube to account. Whether one asks the Government, the Mayor or Tube Lines, somehow the fact that my constituents cannot get to work in the morning is always somebody else's fault and somebody else's problem.
	One of the striking aspects of the work of the PAC is the wide range of areas that it looks at. It is not just the computer overspend disasters; it looks at a whole range of areas. It has done some extremely valuable work on health, of which today's publication of a report on cancer is merely the most recent example. The Committee can claim much credit for pushing the issue of hospital-acquired infection right to the top of the political agenda. It is one of a number of areas in which the Committee's work has stretched over many years and several reports. Back in 2000, the Committee expressed its concern that the NHS had little grip on the problem or the measures needed to tackle it. Worryingly, returning to the subject four years later, the Committee commented that the response to its earlier report had been patchy and that there was still a distinct lack of urgency on several key issues, such as ward cleanliness. Let us hope that the recent political attention devoted to this issue will mean that the PAC's next report on this matter will have better news for NHS patients.
	Lastly, I should like to look briefly at the Committee's valuable work on the Government's programmes on HIV/AIDS. In its thoughtful and considered report on this issue, the Committee recommended that greater priority should be given to tackling the social and economic aspect of the epidemic. The report details the devastating impact the disease is having on the work force of many developing countries, impairing their ability to cope with the epidemic and to run public services or a functioning economy.
	Yet between 1997 and 2003, only 1 per cent. of DFID's country-level spending was focused on this issue. Perhaps more seriously, the Committee noted that the priority given by the Government to their HIV/AIDS projects was not reflected in the spending of the multilateral agencies funded by DFID. In particular, the Committee discovered that, at the time of reporting, only £19 million of the £1 billion contributed by DFID to the European Commission was spent on programmes related to HIV/AIDS.
	In recent months, tackling the epidemic has rightly shot up the international political agenda. I hope, therefore, that there is now a much greater awareness of the importance of this issue among the multilateral organisations with which DFID works. However, it is frustrating to read the evidence given to the Committee from senior officials and experts in the area who freely admit that aid is spent more wisely and effectively if it is spent directly by the UK Government rather than via an international intermediary such as the European Commission. In the light of the conclusions of the report and the urgent need to tackle the AIDS epidemic, there seems to me to be a very strong case to ask DFID to reconsider the level of funding that it deploys via the EU and switch far more of its resources to programmes that it administers directly or via NGOs. I am sure that the Financial Secretary will agree that the priority here must be saving lives rather than EU sensitivities.
	I imagine that HIV/AIDS is a subject that has never been raised before in a debate on the Public Accounts Committee, but I make no apology for doing so. I have chosen this topic to end on for two reasons. First, the significant amount of money now being devoted to such programmes must be effectively scrutinised. We must all be well aware of the difficulties of ensuring that aid for developing countries is effectively and wisely spent. Secondly, I highlight this issue because of the pressing need to tackle an epidemic that has seen 65 million infected and 20 million dead from the disease in the last two decades. I am pleased that the PAC found time in its busy schedule to address this humanitarian crisis. I pay tribute to the Committee's work on this issue and on all the other high-quality reports that we have had the honour to consider this afternoon, and it is with great pleasure that I commend them all to the House.

John Healey: We have had a very good debate this afternoon, led by the hon. Member for Gainsborough (Mr. Leigh), but with a further nine excellent contributions. It is my privilege to respond on behalf of the Government.
	The Public Accounts Committee makes a special contribution to our system of parliamentary scrutiny of the Executive. The Government, especially the Treasury, share several common interests with the Committee and the National Audit Office. We have a responsibility to ensure that taxpayers' money is used economically, efficiently and effectively, and we want to see the delivery of public services to a high standard, with both the public and private sector working well together and applying the best practices and standards of management and skills.
	We see, from the prolific series of reports that the PAC produces and from the contributions to the debate this afternoon, that the PAC does not pull its punches. But however critical, the Committee mostly operates without being politically partisan. That remains one of its traditional strengths as Parliament's leading inquisitor and champion in challenging the Executive. It is rightly tough on Departments and agencies. Accounting officers sensibly take any appearance before the PAC more seriously than almost any other aspect of their responsibilities.
	For those reasons, I pay tribute to the work of the PAC members and, in particular, to the hon. Member for Gainsborough who is starting his sixth year as its Chairman. I wish also formally to recognise and pay tribute to the work of the Comptroller and Auditor General and his staff at the National Audit Office in supporting the Committee. I also wish to add a word of appreciation for Brian Glicksman, for his hard work and his dedication to the Committee. He retired recently after being the Treasury Officer of Accounts for six years and he told me recently that he has appeared before the Committee almost 150 times.
	I wish also to welcome the hon. Member for Chipping Barnet (Mrs. Villiers), who delivered her first speech at the Dispatch Box this afternoon. It was very accomplished and a good contribution to the debate. We look forward to many more appearances, as I am sure she does herself. Based on some of the reports before us, she urged us to look forward not only to the challenges of trying to tackle the problem of HIV/AIDS, but to the Olympics. However, she raised some words of caution on that score. I may say that in my experience, there is an unprecedented effort going into putting in place arrangements for good project management in preparation for the Olympics. I am sure that the PAC will follow those developments closely, as will the hon. Lady as shadow Chief Secretary. We in the Treasury will certainly follow closely the work of the various bodies responsible for preparing for and delivering the Olympics.
	The hon. Member for Gainsborough drew attention to the Committee's 17th report. I have to say that this is something of a tour de force, encapsulating as it does a decade's worth of the Committee's experience and conclusions. It helpfully draws those together in seven coherent themes which he set out for us this afternoon. Each one contains some potent pieces of advice for the Government. Although in each case the Government are already taking action, the Committee shows us that there is considerable scope to improve in the future. We are studying the report carefully and we will respond point by point within the customary two months. The hon. Gentleman has been able, in a timely way, to use the debate to lay stress on the particular observations to which the Committee wants us to pay close attention.
	The hon. Gentleman raised several other important issues. As he acknowledged, we are taking the opportunity afforded by the Company Law Reform Bill to enable the Comptroller and Auditor General to become eligible to audit non-departmental public bodies that are companies, as well as their subsidiary companies. By doing that, we are fulfilling a major commitment that we made in response to Lord Sharman's report on audit and accountability in central Government. I was pleased that the hon. Gentleman described himself as delighted by the move. The Treasury and the Department of Trade and Industry was helped in no small way by the close co-operation of the National Audit Office as the policy and detailed proposals were developed into the firm plans that are now in the Bill. I hope that the Bill will receive a smooth passage through both Houses.
	The hon. Gentleman pressed arguments that he has made before on making the BBC subject to the audit arrangements of the Comptroller and Auditor General. The Government are evaluating the existing arrangements for the audit of the BBC. As the hon. Gentleman knows, the NAO already has a role. It seems appropriate to do that evaluation as part of the charter review and we are thus considering whether any further changes are warranted.
	The hon. Gentleman asked what had happened regarding the financial management of the European Union following the publication of the Committee's 18th report. He would have heard Ministers say that a key priority of the UK presidency was to ensure that progress was made on the European Commission's initiative of a road map towards what it called an integrated internal control framework—the hon. Member for Chipping Barnet might already be familiar with that. The UK co-chaired a panel of experts from all member states that met in Brussels on 21 and 22 September to examine the matters that were raised by the Commission's proposed road map. The outcome of those deliberations provided the basis of the draft conclusions for the meeting of Economic and Finance Ministers on 8 November. The recommendations of the PAC report played an important role in drafting the conclusions that were agreed at that meeting. The hon. Member for Gainsborough asked for an assurance that Ministers will continue to press for progress. From this point on, UK officials will be working closely with colleagues from not only Austria, but Finland, to ensure that the action points from the plan are taken forward under those countries' presidencies.
	Although the Liberal Democrats' Front-Bench spokesmen are increasingly thin on the ground these days, the hon. Member for Somerton and Frome (Mr. Heath) has showed rather more staying power than many of his colleagues. He had already done sterling work from the Front Bench for the Liberals on the Criminal Defence Service Bill earlier today, but he stayed on to speak in this debate, although I must say that he seemed to be speaking for the Liberals from both the Front and Back Benches. I appreciated the fact that he realised that a lot of the work of Government is good, although he sketched out his three specific worries about mismanagement, the misguided application of policy and fraud.
	In a reflective contribution, my hon. Friend the Member for Dagenham (Jon Cruddas) set out several of his worries about trends in population movement and make-up. He also told us clearly the serious social consequences that they can sometimes have. In preparation for the comprehensive spending review, the Treasury is undertaking an analysis of the demographic changes that the country faces in the long term. I will find out whether some of the general points that he made, rather than, perhaps, his specific ones about local authority grant distribution, can be incorporated into that work.
	My hon. Friend the Member for Bishop Auckland (Helen Goodman) made an extremely reflective contribution to the debate and several of her points will be pertinent to the way in which the Public Accounts Committee approaches its work in the future. She expressed an enthusiasm for more timely reports. We share that appetite, so we are glad that the Comptroller and Auditor General has recently undertaken to try to publish some shorter reports that can be more quickly prepared, such as the recent report on MG Rover on which I believe that the Committee will hold a hearing next month.
	I welcomed the contribution of the hon. Member for South Norfolk (Mr. Bacon). It was something of a milestone, as it was his last speech in the House as a single man. We on the Labour Benches wish him and his fiancée Victoria very well for their wedding this weekend. He spoke about the progress that has been made through PFI procurement and recognised the substantial improvement that there has been, with projects delivered on time and within budget, but he also exposed flaws that the Committee has found in specific PFI projects.
	The hon. Gentleman urged me to look closely at the work being led by the Royal Institute of British Architects. I am aware of that work. A meeting of officials in the Treasury is shortly to be held with that group to examine the analysis and conclusions that it has been preparing. I welcome RIBA's contribution to the debate on the design of PFI. We will consider very carefully whether and, if so, how, its proposals can be integrated into the Government's overall procurement policy.
	Undertaking enough design up front during the procurement is already in line with the Treasury's policy. We want to ensure that we have a well enough informed public sector client to manage projects properly, and we need to make sure that they have done enough preparation before launching a procurement. Design is an important part of that, but there will clearly be a trade-off, which must be examined, to ensure that the risk transfer is not jeopardised by undertaking too much of the design before involving the PFI contractor.
	My hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) spelled out clearly and convincingly the lessons on good management to be drawn from the private sector, which it is essential that the public sector learn. Her own business expertise before becoming a Member of the House will clearly be a great asset to the Committee. She stressed the importance of good risk management to effective procurement. I am pleased to say that the National Audit Office has complemented the Government's efforts to force home the message that risk management should be embedded in departmental planning, just as she urged, by collaborating with us in the Treasury to publish a guide which we call "Good Practice in Tackling External Fraud".
	The hon. Member for Tunbridge Wells (Greg Clark) demonstrated from the Conservative Benches the fresh talent that is being brought to the PAC, although the points that he raised about the cost of changes in the tax credit system relate to the recent hearing, on which the PAC has not yet published its report. He has the answers now, and no doubt he and his colleagues will make a judgment on those and the report will reflect that.
	The hon. Gentleman also touched on the problems of the NHS trust in his constituency, and on NHS trust finances more generally. I remind him that three quarters of local NHS organisations are balancing the books or in surplus. I remind him also that the Secretary of State for Health recently announced what she calls decisive action to turn round the minority of NHS organisations that have significantly overspent their budgets. It remains the case that the Government will have trebled investment in the NHS by 2008, and that throughout the country, including in the hon. Gentleman's area, we can see that that investment means extra doctors and nurses, improved quality of treatment and shorter waiting lists for that treatment.

David Heath: I do not dispute what the Minister has just said, but he must realise that there are a number of hospital trusts dotted around the country that have gone through the process of getting their management in order and are trailing, as it were, in surplus, but are nevertheless saddled with insurmountable debts from previous management failures, which are proving an impossible burden for them and causing detriment to the patients in their area through no fault of the present management.

Michael Penning: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. First, that was not a point of order. Secondly, it is necessary to allow the Minister to respond to one intervention before he takes another.

John Healey: The task is not impossible, because the vast majority of our NHS organisations are succeeding. What my right hon. Friend the Secretary of State announced was ways of making sure that the proper support is available for those that are struggling.

Michael Penning: rose—

Greg Clark: rose—

John Healey: I am reluctant to give way to the hon. Member for Hemel Hempstead (Mike Penning). He has been in the Chamber off and on during the afternoon, but he has not contributed to the debate, so if he does not mind, I shall give way to the hon. Member for Tunbridge Wells, who is a member of the PAC and made a contribution earlier. Then I shall conclude my remarks, as I am anxious to let the Chairman of the PAC have the final word, as is traditional.

Greg Clark: I am grateful to the Minister for giving way. He is right that more money is being spent on the NHS, and I whole-heartedly welcome that, but my point was about value for money. It does not make sense from the point of view of value for money not to perform operations when people are ready, willing and able to conduct them but to have to defer them to a date after 31 March when they might have to work overtime to do so. It is not about the volume of money; it is about the systems that are resulting in a lack of value for money.

John Healey: The hon. Gentleman and his colleagues on the Public Accounts Committee may want to look at the question of financial management and control and value for money in that context. If they do so, I look forward to the conclusions that they draw.
	I noted the mention made again by my hon. Friend the Member for Burnley (Kitty Ussher) of her ten-minute Bill. I hope that the hon. Member for South Norfolk is a sponsor, because he is clearly in favour of her proposals. She stressed the attention that the PAC can give to economic policy, especially in the regions, and I certainly welcome that interest.
	I hope that the hon. Member for Basingstoke (Mrs. Miller) sees the fact that 93 per cent. of the PAC's recent recommendations have been adopted and put into practice by the Government as confirmation, which she encouraged, of how seriously we take the Committee's work, although we do not quite see the Committee as somehow our in-house management consultancy, as she suggested. She talked about the importance of child care to both the social and economic future of this country. I welcome her strong, albeit reasonably questioning, support for the policies that we are pursuing. She is right to say that we want every pound invested in child care to work hard.
	In closing, I want to touch on two vital general areas for the Government in which the PAC also has an active interest: first, the efficiency programme following the Gershon review, which the hon. Member for Gainsborough mentioned, as did my hon. Friend the Member for Burnley; and, secondly, the comprehensive spending review.
	The Government are committed to improving public sector efficiency following both the Gershon and the Lyons reviews. Departments own their efficiency plans, however, and it is their responsibility to report on their own progress. They do that in the autumn performance reports and the annual departmental reports. The Chancellor also provided an update on the aggregate progress, both at the Budget last year and in the pre-Budget report, and the Treasury reports on overall progress on efficiency as part of reporting on our spending review 2004 target 9. The efficiency programme is delivering results, as the Chancellor showed in his recent update: £4.7 billion on efficiency gains released back to the front line. In addition to the monetary figure, a total head-count reduction of 31,000 was confirmed and the relocation of a total of 6,300 staff was completed.
	Those aggregate gains are based on departmental returns that are reported against a very robust measurement framework on a quarterly basis. Every pound reported can be traced to individual delivery programmes. Those returns are scrutinised and checked for consistency quarter on quarter. However, we will not consider them final until they have been subject to a full verification, which is of course carried out after the end of each financial year.
	The comprehensive spending review sets an important context in which we can consider and incorporate recommendations received from the PAC. A decade on from the first CSR, the 2007 comprehensive spending review will represent a long-term and fundamental review of Government expenditure, and it will cover departmental allocations for three years, beginning in 2008–09. Since 1997, the Government have shown that we can deliver for Britain a strong economy and sound public finances at the same time as sustained and sustainable growth in investment in public services. But what we need now is an assessment of the long-term challenges facing our country and our public services, focusing on the major global and domestic long-term trends to which public spending and public services need to respond over the next decade. That assessment must also focus on the conclusions of the long-term reviews that are already under way into the future of transport, skills, pensions and local services.
	Britain faces a rapid increase in the old-age dependency ratio. We also face an intensification of cross-border economic competition, an acceleration in the pace of innovation and technology, continued global uncertainty and threats, as well as increasing pressure on our natural resources and global climate. These challenges will have fundamental and far-reaching implications for our public services and they will require innovative policy responses, co-ordination of activity across Departments, and sustained investment in key areas.
	The comprehensive spending review will be tough and challenging. It will take a zero-base approach to assessing the effectiveness of Departments' existing spending in delivering the outputs to which they are committed. The review will also look at how the public expenditure framework can best embed and extend ongoing efficiency improvements and support the long-term investments needed to meet these challenges. The CSR therefore offers an important opportunity for the Government to take stock of what we have achieved and to prepare for the challenges ahead—one to which I am sure the PAC will make an important contribution.
	Perhaps I can end where the PAC's 17th report began. It stated:
	"One of the key strengths of the Committee of Public Accounts is its ability to examine the way in which public money is used to deliver these services right across Government."
	We in the Government and in the House, as well as the public at large and the civil service, owe a debt of gratitude to the Committee for its work. The report went on to say:
	"Governments have acted on most of our recommendations and in doing so, in many cases, have secured financial savings, improved the standards of public services and tackled the risks to successful delivery."
	With the PAC's advice, we will continue to do just that.

Edward Leigh: With your permission, Mr. Deputy Speaker, I shall say a few words to sum up. May I thank everyone who has contributed to the debate? First, I thank the hon. Member for Dagenham (Jon Cruddas), who is valued former member of the Committee. I will raise with the Comptroller and Auditor General the matter of our producing a report on how demographic factors can influence public policy. The hon. Gentleman made his point extremely well.
	I also thank the hon. Member for Somerton and Frome (Mr. Heath) for speaking so eloquently in our debate. He suggested that the National Audit Office should be involved in the debate on identity cards. There is a slight problem there, because the NAO is very keen to stay out of current political issues. However, I agree that that issue is one that we need to keep careful tabs on.
	I am very grateful to the hon. Member for Bishop Auckland (Helen Goodman) for her contribution. She is a highly valued new member of the Committee, and she uses her Treasury experience to good effect. She made a very good point about the problem relating to our reports being produced so long after the event. I sometimes feel that we are kicking a corpse that has been dead for a long time, as happened several times in relation to the dome. I have raised this issue again with the Comptroller and Auditor General and he has promised me that we can try to produce much shorter reports that hon. Members can actually read. If they were about 20 pages long and written in narrative form, they would be easily understood. That would enable us to drive the oversight process forward much more quickly.
	I am grateful to my hon. Friend the Member for South Norfolk (Mr. Bacon) for his contribution today and for being a sterling member of the Committee throughout my chairmanship. With the right hon. Member for Swansea, West (Mr. Williams), we alone on the Committee have said that, if someone becomes an Opposition spokesman, they must leave the Committee. We have maintained the purity of the Committee in that regard. My hon. Friend the Member for South Norfolk has chosen to stay on the Committee and not to become an Opposition spokesman, as his abilities merit. I am grateful to him for that.
	I thank the hon. Member for Portsmouth, North (Sarah McCarthy-Fry) for her contribution and for the valuable experience in risk management and project management that she has brought to the Committee. I am also grateful to my hon. Friend the Member for Tunbridge Wells (Greg Clark) for his powerful remarks about our work in controlling the para-state, as he put it, and those parts of the state that are not as accountable as they should be.
	I am grateful for what the hon. Member for Burnley (Kitty Ussher) said about smart procurement. I say this to my hon. Friend the Member for Basingstoke (Mrs. Miller): it is true that we view ourselves, in our capacity as allies of the Treasury, as low-paid management consultants—paid much less than those employed by the Financial Secretary—but we do our best.
	My hon. Friend the Member for Chipping Barnet (Mrs. Villiers) experienced her first outing on the Front Bench. Yesterday we had before us a permanent secretary with another 14 years to serve. I have no doubt that my hon. Friend will serve for at least 14 years with great distinction, in and out of Government. She spoke of delivering a 1 per cent. efficiency improvement—£14 billion of gains. That is a lot of money to play with.
	Of course I also thank the Financial Secretary for what he said. I am very proud of our work. In an era of rapid increases in public expenditure we do not question what is being done, but I believe that we can make a difference. This is one part of Parliament that is doing a superb job.
	I thank all who have contributed to this excellent debate.
	Resolved,
	That this House takes note of the 17th and the 20th to the 52nd Reports of the Committee of Public Accounts of Session 2003–04, the 1st to the 30th Reports of the Committee of Public Accounts of Session 2004–05, and the 1st to the 3rd, the 5th, 6th, 10th and 11th Reports and the First Special Report of the Committee of Public Accounts of Session 2005–06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memoranda on these Reports, Cm 6271, 6282, 6302, 6303, 6304, 6332, 6355, 6416, 6441, 6458, 6468, 6496, 6577, 6578, 6579, 6609, 6667, 6668, 6682, 6689, 6712 and 6724.

Michael Penning: On a point of order, Mr Deputy Speaker. I seek your advice and help for school children in my constituency. I think that there is cross-party support for our encouraging as many young people as possible to visit the Palace, but several schools in my constituency have told me that they will not organise visits any more because they are deterred by the cost of parking and difficulties caused by the anti-terrorism measures that have been adopted outside.
	I contacted the office of the Mayor of London, which told me that the matter was not negotiable; the Palace would have to deal with it. I wonder whether you could use your good offices to help students and other children in my constituency to come to the Palace more, and to address the parking issue.

Mr. Deputy Speaker: It is obviously important for all young people, particularly students, to visit the House of Commons to see how we work, but that is not a matter directly for the Chair. It is, of course, a matter for the House authorities. The hon. Gentleman has put his comments firmly on record; no doubt the House authorities will think about them, and will decide what to do.

PETITION
	 — 
	Luton Airport

Peter Lilley: I wish to present a petition opposing the massive expansion of Luton airport with two runways and two terminals, disgorging 30 million cars on to the roads of Hertfordshire. The petition has been signed by 7,710 local residents. There have also been 1,770 text messages and more than 1,000 letters, 250 of which arrived in today's post.
	The Petitioners therefore request that the House of Commons urge the Government to ensure that Luton airport remains a medium haul, medium sized airport and to refuse permission for plans to make it second only in capacity to Heathrow.
	And the Petitioners remain, etc.
	To lie upon the Table.

COUNTERFEIT MEDICINES

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coaker.]

Charles Walker: The counterfeiting of drugs is a global problem. The World Health Organisation estimates that between 8 and 10 per cent. of the global medicine supply chain is counterfeit. That represents up to £20 billion worth of medicines.
	In developing countries, up to 60 per cent. of public and private health expenses are used to buy medicines. The WHO estimates that 25 per cent. of those medicines are fake, and in some countries the figure could be as high as 40 per cent. In the world's poorest and most vulnerable communities, people are dying needlessly of AIDS and malaria. Counterfeiting hot spots include Mexico, Pakistan, India, China and Russia.
	Counterfeits are dangerous for a variety of reasons. They may be contaminated, they may contain too much or too little of the active ingredient, or they may contain none at all. Counterfeits are totally different from generics. Generics must have the same bio-equivalence as the original patented drug; counterfeits are fakes, and often lethal fakes.
	In China in 2003, nearly 1,000 drug-counterfeiting factories were closed and millions of fake drugs were seized. It is estimated that 100,000 Chinese people died that year as a result of taking counterfeit medicines.
	In Africa, half of malaria medicines are thought to be fakes. In the west, drugs are normally finished and packaged to a higher standard. For that reason, it is almost impossible for patients and many professionals to see the difference between real and counterfeit medicines. In wealthier countries, the most frequently counterfeited medicines tend to be new, expensive lifestyle drugs. For example, it is estimated that half the Viagra sold over the internet is worthless.
	The profits from pharmaceutical counterfeiting are huge and the risks lower than those involved in trafficking narcotics. Counterfeiting is linked to all forms of organised crime such as money laundering, drug trafficking, terrorism and other illegal activities. Distribution channels mirror those of the illegal drugs trade, and in many developing countries drugs often disappear into a black hole. Corruption is rife. Retroviral drugs sent to Africa at reduced prices are often intercepted by corrupt officials or gangs and sold back to Europe to be replaced by worthless copies in Africa.
	As borders become more porous, the global trade is expanding. Counterfeiting is no longer a cottage industry; it is big business. Criminal gangs are so professional that they will buy the same manufacturing and packaging equipment as drug companies, allowing them to produce up to 50,000 tablets an hour.
	Pharmaceutical products are attractive to criminal gangs because they are easily transportable and command a high price per unit. Profits from fake pharmaceuticals can be larger than those from narcotics such as heroin and cocaine. The added bonus for traffickers is that the trade carries a lower risk than that in narcotics because law enforcement agencies are perhaps not as aware of the problem.
	The problem of illegal medicines needs to be handled carefully. Fortunately, in the UK, counterfeits remain extremely rare when sourcing is done through recognised pharmacies. The UK supply chain remains one of the most difficult to penetrate, with 600 million prescriptions written annually. However, in July last year, counterfeit Lipitor, a powerful cholesterol-busting drug, was discovered. The counterfeit was made to look like a UK pack and was traced by the Medicines and Healthcare products Regulatory Agency to two separate licensed UK wholesalers. Of course, the manufacturer of the genuine drug issued a total recall. Of those packs returned by pharmacists, however, more than 50 per cent. were found to be fake after being analysed.
	Fifteen months earlier, in April 2004, detectives raided a warehouse near Wembley stadium and found a factory producing thousands of fake prescription medicines every day. Enough mixture was seized to make more than 20,000 tablets an hour—Viagra, steroids, tranquilisers and antidepressants. They were expertly packaged and labelled, and some active ingredients were present, but not the right ones.
	When dealing with counterfeits, criminals are taking the long-term view. Fake drugs are offered at just below market price so as not attract attention and the continuing growth in counterfeiting comes when there is increasing concern about the integrity of the UK wholesale supply chain.
	UK wholesalers are licensed by the MHRA, but gaining a licence is relatively easy. Those applying for licences are rarely asked to produce a passport, birth certificate or driving licence and it is even unclear whether a Criminal Records Bureau check is routinely undertaken. Against that background, the number of wholesale licences issued has risen tenfold in the past 12 years, providing additional entry points for counterfeits. Once a licence is granted, wholesalers can trade almost without restriction.
	The growth in the number of wholesalers mirrors the growth in parallel trading. In recent years, a new market has emerged that has understandably seen the national health service and other purchasers exploit price differentials in medicines across the European Union. Each year, 140 million medicines are parallel traded across the EU of which perhaps 70 per cent. are destined for the UK. Parallel trade accounts for up to 20 per cent. of all prescription medicines sold in this country.
	Medicines are sourced at the cheapest unit price across the EU, but, to comply with the language and packaging requirements of national markets, drugs are often repackaged and the seals broken. The growth in parallel trading means that, often, pharmaceutical products pass through the hands of multiple distributors, creating a highly fractured supply chain that can be accessed by determined counterfeiters.
	A Bermuda triangle has been formed by parallel trade, counterfeits and online pharmacies. It is the growth of unregulated internet pharmacy that provides the best opportunity for counterfeit and illegally re-packaged medicines to enter the supply chain. The internet is like a sweetshop, except one can buy painkillers, tranquilisers and even methadone; indeed, one can buy methadone from hundreds of sites. Most online pharmacies are unregulated and will dispatch dangerous medicines without prescription. Many people, including patient groups, pharmacists and doctors, believe that online pharmacies represent a significant danger to those ordering prescriptions over the web.
	There are now more than 2,300 sites selling drugs direct to the consumer. The five most advertised drugs are Viagra; Phentermine, a weight loss drug; Xenical, a weight loss drug; Propecia, a hair loss drug that would be lethal to women; and Adipex, a weight loss drug. Those sites are domiciled around the world but in almost all cases they are unlicensed to sell or prescribe prescription medicines.
	Over the past six years, across the Atlantic, US drug enforcement agents have made 180 internet drug arrests but they know that they are just scratching the surface. Internet pharmacy sites are inexpensive to create and hard to shut down; up to 80 per cent. of drugs sold online are counterfeit.
	The nature of this internet trade is frightening. A UK charity, the Depression Alliance, was able to buy prescription medicines for depression over the internet with a discount on bulk purchases; no consultation, no diagnosis, no prescription and no pharmacist. The Depression Alliance bought enough of a tricyclic antidepressant to kill eight people. Even after entering into online consultation that revealed that the potential buyer suffered from a pre-existing diabetic condition, self-harmed and repeatedly tried to commit suicide, the drug was still dispatched.
	As I have said, this country still has a robust regulatory system. However, I am concerned that it may not be keeping pace with the emergence of a distribution channel that is tailor-made for sending counterfeit drugs to the UK. Of course, the last thing that we want is to create unnecessary panic. However, we need to accept that counterfeiting is a growing global problem fuelled by organised crime, unrestricted parallel trading and the growth of internet dispensing.
	In the UK, internet pharmacies pose a growing threat to public health. They are largely unregulated; in the best case, these illegal pharmacies are dispensing sugar and, in the worst case, poison. I hope that as a result of this short debate the Government will take a good look at our regulatory system to see what measures can be taken to safeguard the public from this new and emerging threat.

Jane Kennedy: I congratulate the hon. Member for Broxbourne (Mr. Walker) on securing this important debate, and on his informed and balanced assessment of the threats posed by counterfeit medicines. Compliments from Ministers to Opposition Members rarely enhance their careers, but they are merited in this case. I shall seek to reassure him and the House that I and the Government take a great interest in the issue.
	I can assure the hon. Gentleman that the Government take the issue of counterfeit medicines extremely seriously. Counterfeit medicines are often unknown and can enter the market in many ways. Although not a new problem, the international nature of the pharmaceutical industry and of markets means that the manufacture and distribution of counterfeit medicines can present new opportunities to criminals who are growing in enterprise and sophistication. Indeed, trade in counterfeit medicines is now a global problem; the World Health Organisation estimates that up to 10 per cent of medicines worldwide may be counterfeit. As the hon. Gentleman suggested, an even higher proportion of medicines in poorer countries are thought to be counterfeit. This has obvious, and serious, consequences for public health and costs the pharmaceutical industry many billions of pounds annually.
	The manufacture and distribution of counterfeit medicines is a real problem for countries where the regulatory framework is weakest, and the EU systems do provide substantial protection. Nevertheless, there is some evidence of counterfeit products being provided direct to UK customers in the UK by mail order, via the internet or on a personal basis. I certainly share the hon. Gentleman's and the public's concern about the availability of potentially counterfeit and unregulated medicines through these routes. They cannot be guaranteed for safety—as the hon. Gentleman described—quality or efficacy. While the UK's legitimate supply of medicines through pharmacies, hospitals and retailers is tightly controlled and internationally acknowledged as difficult to penetrate, I recognise that no supply chain can ever be completely secure. Proper regulation and robust inspection, surveillance and enforcement are constantly required to preserve the integrity of the market and to protect public health.
	The Medicines and Healthcare products Regulatory Agency, to which the hon. Gentleman has rightly drawn attention, regulates the use of medicines in the UK. The MHRA is responsible for ensuring compliance within a comprehensive EU regulatory framework that imposes strict controls on the licensing, manufacture, sale, supply and advertising of medicines. That includes the licensing and inspection of all UK manufacturers, wholesale dealers and importers of medicines. The agency also inspects manufacturers in non-EU countries exporting to the UK. Controls on sale, supply and advertising of medicines direct to the public apply without distinction across all types of retail outlets—traditional and electronic.
	The MHRA has developed an anti-counterfeiting strategy that builds on that regulatory framework and aims to minimise further the risk of counterfeit medicines reaching UK consumers and patients either on a personal basis or through the legitimate supply chain. For example, the agency will continue its enforcement role to ensure that counterfeiters are prosecuted and counterfeit products withdrawn from the market. It will extend its medicines surveillance scheme to sample and test medicines across the whole supply chain. It continues to develop its inspection functions to ensure that all its inspectors are trained in up-to-date counterfeit inspection methods and techniques. It will maintain a close working relationship with industry to ensure that regulators and manufacturers continue to work effectively together to combat the counterfeiters. It has developed an education programme targeted at all key stakeholders to raise awareness of counterfeit medicines and of what to do if such medicines are discovered or suspected. It will, of course, constantly keep the legislation and its operation under review.
	The hon. Gentleman raised concerns about the integrity of the UK wholesale supply chain and the procedures for gaining wholesale dealer licences. His concerns echo recent media interest in the issue. Let me put it in context. There are currently 1,600 wholesale dealers' licences, and a comprehensive system is in place to control those. Once granted a licence, wholesale dealers are subject to repeated inspections, both planned and unannounced. Nevertheless, the MHRA has examined its procedures and will introduce further safeguards to check the bona fides of named individuals on wholesalers' licenses.
	The hon. Gentleman also referred to parallel importation as a possible source for counterfeit medicines, which has been drawn to my attention on several occasions. Currently, there is little evidence in the UK that the repackaging processes of parallel trade have been the route for introducing counterfeit medicines into the legitimate supply chain, but I have asked the MHRA to continue to monitor the situation and to take appropriate action if there is evidence that that is the case. If there is such evidence, I would be more than happy to see it.
	Sale of medicines direct to the public presents a different challenge, especially given the global nature of the internet. It is certainly true that some websites offering medicines belong to unscrupulous vendors, some of which the hon. Gentleman described. Many of those vendors sell unlicensed and prescription-only medicines and some sell counterfeit drugs that are potentially harmful. That is particularly true of so- called lifestyle drugs, such as those to which he drew attention—medicines aimed at male impotence, slimming products or hair loss products. We are keen to ensure that the public make informed choices about their health, and they need to be aware that products purchased in that way cannot be guaranteed for safety, quality or efficacy.
	I should say at this point that the bona fide internet pharmacies must be operated from pharmacy premises that are registered through the Royal Pharmaceutical Society of Great Britain. Consumers are always advised to consult the RPSGB online register before purchasing medicine via the internet. The MHRA will not hesitate in taking appropriate enforcement action over illegal supply over the internet. It is currently investigating 103 cases involving internet sales and has prosecuted 12 cases since 2000.

Charles Walker: Does the Minister feel that there will be a role for Customs to be alert to the threat of medicines being imported into the UK once the order is made?

Jane Kennedy: My experience of such organised crime—there is no question but that, as the hon. Gentleman rightly points out, it is organised crime—is that the more co-ordination and sharing of information there is between law enforcement agencies and, in this case, the MHRA, the more effective the outcome will be. I take his point on board and will look to ensure that co-ordination is as good as it can be, including with Customs where necessary.
	Given the uncontrolled nature of the internet, and the fact that many sites will be based abroad, as the hon. Gentleman described, a key aim is to ensure that the public understand the risks of buying medicines from such sites and are warned against them. The MHRA has an active campaign to educate the public on issues associated with the purchase of medicines on the internet. That includes regular information and advice, targeted to specific sectors of the population or in respect of specific products, and delivered through its website and the media to ensure that consumers can make fully informed decisions about their health.
	As I said earlier, counterfeit medicine is a global issue and is of global concern. It is under active discussion in a range of international forums, particularly within the EU, the Council of Europe and the World Health Organisation. The MHRA takes an active part in all those discussions and, particularly during the recent UK presidency, has been leading the debate on an EU strategy to combat counterfeit medicines. It will continue to do that.
	On a practical level, the MHRA liaises regularly with other regulatory and enforcement agencies at home and abroad to conduct joint investigations, to exchange expertise and experience and to share knowledge and intelligence. That will also continue. For example, the hon. Gentleman may be interested to hear that the MHRA is leading a Europe-wide Tamiflu counterfeit surveillance project, and he may be aware that the MHRA recently carried out a large seizure of suspect Tamiflu in London, confiscating some 6,800 packets of the medicine representing a retail value in excess of £1 million.
	The MHRA is also co-ordinating a training programme to deliver training for European partners through the EU medicines enforcement officers network and the Council of Europe. We hope to extend such accredited training through the Permanent Forum on International Pharmaceutical Crime, which includes drug regulatory authorities from the EU, the United States, Australia, South Africa and Singapore.
	It is clear that the problem of counterfeit medicines is of growing concern. If it grows unchecked and is not combated effectively, it may become an increasing threat to public health. We cannot afford to let that happen and I have asked the MHRA to continue to treat that as a priority and to keep me regularly informed on progress in its work in this area.
	I am particularly pleased to have had the opportunity to report to the House in my response to the debate. I am grateful to the hon. Gentleman for allowing me to consider what he was going to say, so that I could respond as fully as possible. I hope that the House will be reassured that we take what he said seriously and are working hard to ensure that we combat that threat.
	Question put and agreed to.
	Adjourned accordingly at twenty-one minutes to Eight o'clock.